A life insurance policy is very important for small business owners. When a person dies suddenly, it affects not only businesses but also families. If it’s your boss or a key member of your company, the impact is even greater.
Business would turn around if the owner of the company died suddenly. It takes time to calm down and get things back on track.
On the other hand, if a key member dies, it will certainly take longer to recruit and train a new manager for the same position.
Consider a scenario where you decline short-term life insurance or life insurance. Long-term care insurance.
Life insurance scenario
You own and operate a partnership company that manufactures and sells retail goods. You have been running the company for over 10 years of him and have about 40+ staff doing the work for you.
Over the years, your company has built a good reputation locally and expanded its customer base. You share a common vision with your partner and expect to significantly increase sales and profits in the coming months. Things are going well. life is beautiful.
One morning, you received a phone call to learn that your business partner had died in a terrible car accident. You are disappointed and it will take time to recover from your grief and get your business back on track.
A few weeks later, I get an unexpected phone call. Your business partner’s spouse talks about how her husband was heavily indebted in a commercial real estate transaction and suffered losses as a result. As her 50% shareholder and investor in your company, she has all the rights to require you to sell the business and settle any claims. She has only two choices. Either sell the company you have built for over 10 years, or borrow money from a financial institution to pay off your membership dues.
Either way, it can be very stressful. You start to regret your decisions for not listening. insurance agency. Having purchase and sale contract life insurance can save you during these stressful times.
To avoid such uncertainties in the future, now is the best time to close a sales contract.
But before you start exploring, wait. best life insurance company Get to know the different types of life in your city Insurance policies for small businesses and how they work.
3 types of business life insurance
1. Individual life insurance
Individual life insurance benefits are provided to family members of the employer. This type of insurance is suitable for business owners who have a habit of taking out loans on other real estate and assets for their company operations.
A common scenario is when the owner dies, the family typically sells the company to pay off the loan amount. In most cases, members compromise on a price that is less than the actual cost because the situation requires a quicker response.
individual Life insurance You can protect your family by providing the appropriate compensation amount specified in your policy.
2. Sales contract
This type of insurance is useful when the deceased owner’s family members do not have the knowledge or interest in running the business. They may want to sell it.
of Insurance company It buys the business for a pre-determined amount as the contract is signed.
3. Key person insurance
When a business owner or manager-level person dies, it is common for companies to suffer losses in the form of boosting revenues and profits from future projects, deals, existing customers, etc.
People who use the services of a business because they know the owner well are usually the first to pull out of the deal. There are also additional costs to the company when it comes to hiring and training new candidates to replace the deceased manager. All of these result in significant revenue loss for the company.
This is where key person insurance can help. It provides cash to a business after the death of an owner or operator, helping bridge the gap between loss and recovery. A person’s loss is a loss, but having extra cash during stressful times like this can prevent a company from suffering serious losses.
Conclusion
Most small business owners think Life insurance It’s an extra burden. However, it is only in the unexpected death of the company’s owner or manager that they realize its value. Acting quickly is critical to protecting your business and your family with life insurance.
Always talk to celebrities insurance broker Take steps to protect small businesses from uncertainty before it’s too late.
Good luck and stay safe!
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Author bio: Juliet is a writer for Rootfin, a site that helps you compare top corporate life insurance plans and choose the right coverage under the guidance of a professional agent.
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