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Protect what you've built
Protect what you've built
As a business owner, professional, contract worker or any other one of Canada's 2.7 million self-employed workers,1 you have probably invested many hours and invest significant resources in your enterprise, particularly during its early years of growth. As your successes accumulate, life insurance can help you protect what you've gained as well as protect you and your family.
No employer means no employer benefits
Self-employed workers generally don't have access to the same, sometimes generous, group benefits plans offered by Canadian employers to attract and keep top talent. Yet if you have a spouse, children or other dependents, you will want to provide them with protection in case you case something should happen to you.
Perhaps you're counting on the equity in your business to provide financial security to your family if something should happen to you. Unfortunately, it may not provide the level of security you want for your loved ones.
In some ways, you are your business
As an entrepreneur, you are likely to be the primary source of your business's value. Profits could be crippled if harm befell you and the goodwill you built up in the business could quickly evaporate.
Think of yourself as the axle on a wheel, in which every spoke (your suppliers, workers, clients, mentors, and government officials) connects to you, the business owner, but none are connected to each other. If you step out of the picture, no matter how good the individual components are, the entire structure is at risk of collapsing.
Flexible, affordable protection
To protect yourself, your family and your business, consider the following types of insurance.
Term life insurance. Term 10 or Term 20 provides cost-effective protection tool for a pre-determined length of time — for example, while your children are young and you are building your business. Term life insurance may be especially useful if you have taken out loans or have a credit line to acquire fixed assets such as production equipment. In fact, your lender may require it.
Universal life insurance. Universal life offers excellent coverage that includes a savings component, which can help supplement your  income in retirement or during a time of disability.* You can also have the best of both worlds by using universal life insurance as your foundation for permanent protection and adding term insurance for specific, shorter-term, targeted needs.
Critical illness insurance. A critical illness rider can be added to your life insurance policy to provide tax-free funds if you are diagnosed with conditions such as a heart attack, stroke or cancer.
We're here to help
We understand the challenges you face as a self-employed worker. We can work with you to determine the extent of your life insurance needs and recommend strategies that will help to protect your most valuable asset: yourself.
*For further details on what qualifies as a disability, refer to the policy contract.
1 Statistics Canada, Labour Force Survey, November 2013
The information contained herein has been created for advisors' general information only.
This material is not intended to provide specific financial, tax, investment, legal or accounting advice and should not be relied upon without seeking the advice of a professional. For complete details of the products described in this article, please refer to the respective policy and other disclosure documents. Any legislative or tax related references are current as at the time of circulation.
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