Whether as an executive or CEO of a large business, or as owner of one of the small businesses that are the backbone of this country, women are increasingly in charge of companies and increasingly needing to consider life insurance as a way to protect that for their families or their employees.
Business life insurance has always played a key role in business continuation. We’ll discuss three ways that women can ensure that the value of their business passes in the right direction in the case of an untimely death.
In a partnership, a buy/sell policy is the best way to ensure that both partners get what they want in the event of a death. If a partner dies, their half of the company is owned by their estate. This leaves two options for the surviving partner. Either buy the deceased partner’s from the family, or consider that the family may either sell that part of the business to a third party, or become a part of the business.
With life insurance both partners carry on each other, in an amount equal to their portion of the business, if the unfortunate happens, the money is instantly available to buy out the partner’s family. The alternatives are much to unpredictable not to insure against.
In the second scenario, a sole proprietorship, the business in many cases has virtually no value to the businesswoman or her family. The value in many businesses is the income. In this case, life insurance is all about loss of income. You have a job that just happens to be owned by you. If the business doesn’t have any inherent sellable value, insure to replace income.
Third is something we don’t see often, but life insurance can make the difference in making this scenario work for your employees. There are often situations where employees, or at least a key employee could continue a business on. If there is no estate or family with an interest in the business, a policy large enough to effectively transfer the business would work. If there is an estate, a policy to pay the value to the family and transfer the business to the employee would work.
Bottom line. Women are more of a force in business all the time. Protecting that can be done most effectively with business life insurance.