Life insurance is a topic that many people don’t want to think about. However, life insurance is an important investment for small business owners and entrepreneurs because it can protect the livelihoods of their families. Whether you are starting your own business, or have been running one for years, life insurance can help protect your family’s future in case something unexpected happens.
How life insurance can help your business
If you are a business owner, life insurance is very helpful. Life insurance is designed to replace lost income from the death of a breadwinner. If you die, life insurance can help your family continue living without having to worry about how they will pay for bills or rent in order to keep their business going.
Investing in life insurance may seem like an expense that small business owners should skip because it costs money, but life insurance can provide peace of mind for both the business owner and their family. In addition to providing financial security in case something happens to you, life insurance is also a way to plan your own legacy as an entrepreneur.
Types of life insurance coverage
There are several types of life insurance coverage that business owners can consider. Some of these include term life, whole life, and universal life insurance.
Term life insurance
Term life insurance provides coverage for your business from the time of purchase through your death or until you reach age 85, whichever occurs first. The premiums are guaranteed not to increase during that period and it does not accumulate cash value over time. This type of life insurance may be the best for you if your business does not have the capital to invest in a whole life policy.
Whole life insurance
Whole life insurance is a life insurance policy that covers you and your dependents for a lifetime. The coverage lasts until the insured person reaches age 120 or dies, whichever comes first. The life insurance company agrees to pay out the death benefit if something happens to the insured person before he or she turns 65 (unless they had an accident).
Universal life insurance
This type of life insurance covers yourself and your dependents until age 120 or you die, whichever occurs first. It accumulates cash value over time that can be invested with money management skills. A new type of universal life insurance called indexed universal life has an interest rate that increases or decreases based on how the market is performing.
How to choose the best policy for your business
Depending on the size of your business, you may need life insurance coverage for more than just yourself. If you have children who are dependents and they work for the company in a full-time or part-time capacity, they might also be covered under your policy by law. The easiest way to figure out how much life insurance coverage to get is by figuring out your current cash value, which you can find online at life insurance calculators.
When you purchase life insurance for your business, it’s best to go with a company that offers the most affordable rates and will be around if something happens to you or one of your employees. It can also be worth investing in umbrella coverage on top of this as well so they’ll have extra protection should anything happen outside of life insurance.
How many employees do you have? Do they work at home or in an office setting? If the majority of your staff works from home, then it may be best to purchase a business owner’s policy because this would cover them if something happened while they were working by themselves. On top of that, some companies offer group rates for employees that work from home.
When do I need to buy a life insurance policy for my business?
A life insurance policy should be purchased as soon as possible, especially if you have employees. Some life insurance agents recommend that small business owners purchase their policy within the first year of operation and then every year after to keep coverage up-to-date with your company’s needs.
Life insurance can provide security for your business. Life insurance for an entrepreneur will help provide peace of mind and an opportunity to rest assured that their work is being carried on even if they are no longer here. It can be a valuable tool for any small business owner, so you should get it sooner rather than later.
Investing in life insurance for your small business is a no-brainer. With increasing medical costs and the ever-present risk of a business owner dying unexpectedly, it makes sense to invest in this type of coverage so that your loved ones are taken care of – not just financially but emotionally as well. Don’t wait any longer to make sure you’re covered! You can contact a financial advisor, like Dundas Life, to get started.