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Life insurance for small business
Life insurance for small business
Protect your business, protect your family 

Each business may be unique, but there’s one thing all business owners have in common – the need to protect their business against risk. And protection is important whether you’re starting out or running a well-established business. 

One of the greatest risks to your operation is that you, a partner or key employee could pass away unexpectedly or develop a critical illness. That’s why life insurance and critical illness insurance are so vital. Together, they help protect your business and your family’s financial security. 

Protecting a sole owner 
When a business is a one-person operation – no partner, no co-owner – there are usually two possible outcomes upon the owner’s passing. Either the business will end, or it will be sold. Either way, life insurance plays a key role in protecting your family after you are gone. 

In the first instance, the life insurance benefit can replace the business income that was supporting your family. In the second instance, your family could use the life insurance proceeds to keep the business going while they find a suitable buyer, perhaps also covering the costs of a professional business broker.

Critical illness insurance plays a slightly different role. You might use the lump-sum benefit to hire a manager to keep the business going while you undergo treatment and recover from cancer, heart attack, stroke or another covered condition.

Insuring a key person 
Do you have a star employee who’s essential to the success of your business? This could be a sales leader, product or service specialist, project manager, or an executive who helps you run the company. Ask yourself whether your business would suffer financial hardship if this key person passed away unexpectedly or was away for an extended period with a critical illness. 

You can manage this risk by purchasing life insurance and critical illness insurance on the key person. The insurance benefit compensates for any lost revenue and covers the cost of recruiting a temporary or permanent replacement.

Do you have a co-owner or partner? 
If you’re a co-owner, you may already have or be considering a buy-sell agreement. Under these agreements, two or more active owners agree to purchase the shares or business interest of the other owner(s) in the event of death, disability, critical illness or retirement. 

Life insurance can be the ideal funding solution. Say that a business has two owners. Each is the owner and beneficiary of a life insurance policy on the other person’s life. When one owner passes away, the surviving owner receives the insurance amount and uses it to purchase the late owner’s interest. The surviving owner is able to buy the business without borrowing, and the late owner’s family benefits by receiving the value of the business in cash. 

Creating an inheritance
An estate planning challenge faces owners with one child who’ll eventually take over the business and another child who will not become an owner. How do you provide a fair inheritance for the child who’s on another career path when most of your assets are tied up in the business? 

The answer can be life insurance. One child takes over the business, the other is beneficiary of a life insurance policy on your life, and both children receive a significant inheritance. 

How we can help you
At your convenience, we’ll meet with you to learn about your business and your personal and family situation. We can perform a business insurance evaluation to determine where you need protection against risk. Working with you, and possibly your accountant and lawyer, we’ll put together an insurance solution customized to your unique business needs. 

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