Building a business takes a lot of effort, time and money. With your attention typically focused on daily tasks and personnel, you may be unaware of critical financial planning issues that could impact your long-term success. Unforeseen events happen all the time, and if you haven’t properly planned for them, it can take a major toll on your business and your financial well-being. Did you know that due to otherwise avoidable events, nearly 70% of family businesses don’t survive to a second generation? Life insurance, disability insurance and “key man” insurance are critical tools to protect the value of your business to you and your family. Ask yourself these questions when it comes to thinking about protecting the full economic value of your business:
1. What Will Happen to My Family?
Owning a small business is tough. Your family’s future is riding on the success of your business. Your employee’s future is riding on it. Even your customers’ future or happiness often depends upon you. As businesses grow, hiring more employees and expanding puts a lot of pressure on your P’s and L’s. But, what if something unexpected were to happen to you? Insurance can protect your family as well as your business from scrambling to stay afloat while dealing with an unexpected loss. A permanent life insurance policy is a popular and strong option for many business owners. With permanent life insurance, typically whole life or universal life, your policy builds available cash in addition to providing your family a death benefit on a guaranteed basis. Life insurance helps to replace part or all of your full economic value to your family.
2. What Will Happen to My Business if I’m Not There?
Have you ever noticed how hard it is to really take time off when you’re responsible for your business and all your employees? It’s your baby, nobody can quite do it as good as you can. What if you were injured? Who would run the day-to-day operations, who would stay on top of strategies and customer relationships? Disability insurance can replace a sizable portion of your income while giving you time to recover.
3. What If Something Happened to An Important Employee?
Life insurance and disability insurance doesn’t only cover your family, but it can be structured to cover your business as well. When owning your own small business, the loss of an employee can be devastating, especially if they are highly valued. The last thing you want to deal with in the face of tragedy is having to worry about how your business will also be affected. By having a life or disability insurance policy on key employees, businesses can “weather the storm” if the unexpected happens.
Take the stress out of financial planning by finding a Leap professional with an expertise in small business. They will help guide you and your family to sane, sound, and simple financial decision making for your small business.