Life Insurance for the Self-Employed
How to Look Out for Your Family and Your Business
Life insurance is a financial priority for everyone, but it’s especially valuable if you own a business, or even if you’re thinking about starting one. As a business owner, you have a lot more at stake than other policy holders because you don’t have a group policy to fall back. The responsibility and cost are solely up to you. The key is to know what you’re doing when purchasing your plan and knowing what can happen, if you don’t.
As mentioned before, you have a lot more to consider when looking for your perfect life insurance plan. Not only do you have to ensure you’re family’s well-being, but also the health and wellness of your business. Assuming that you can just let you’re business go when you die, leaves your family in a dangerous financial position. The two, despite any efforts to keep work and personal life separate, are in fact, inter-connected on a personal level, but especially on a financial level. Due to the many complexities that arise, it’s suggested by financial experts to sit down with both a financial advisor and a very experienced insurance agent. Together with the two of them, discuss your business past, present and future and what you want for your family after you’re gone. Iron out any questions and concerns in advance so that you know you’re getting the right coverage for you.
Keep in mind that Debt with a capital “D” is the main reason you need life insurance when you’re self-employed: a) because you’ll want to provide for your family’s expenses after you’re gone i.e. funeral arrangements, mortgages, child care, college funds, weddings, etc. and b) because you’ll have to pay off any liability you’ve taken on since the start up of your business to avoid that debt falling back on your family. This is where that inter-connection between your family and your work lies. Having a sound life insurance policy will give you the peace of mind that your loved ones won’t loose their last penny to settle your outstanding business accounts. Instead, wouldn’t it be nice to leave them with an income to lean on? This is why it’s important to buy enough coverage not only for your business accounts, but also your family’s immediate personal bills, AND also your future business capital. If at all possible, go with the best possible coverage out there. The cost may seem steep at first, but everyone will be thanking you in the end when it’s paid out.
Another aspect to consider as a business owner is taking out a life insurance policy on a co-owner. By doing this, you can list your business as the beneficiary of the policy, thus allowing you to keep things running until a qualified candidate can fill the position. Many times, it is the loss of a principal founder that brings even the most well-structured company to a deadly halt.
So by spending a little extra now you can save a lot of money (and a lot of grief) for your loved ones in the end and that’s a very good bottom line!
