Why Small Business Owners Need Life Insurance
Why Small Business Owners Need Life Insurance
As a small business owner, you’re busy running your business every day but what about thinking ahead and getting life insurance to protect your business.
Small business owners need business-owned life insurance to help ensure their family won’t be left struggling financially or to keep the business going.
If you are the only owner of your business, your family depends on its income and any employees depend on your business for their salaries. You may have a business partner who wants to keep it running in the event of your death.
What is life insurance for small business owners?
As a small business owner, your life insurance policy can be personally or corporately owned. Or, you can choose to have both personal life insurance and business-owned life insurance to increase the level of protection you want to provide for your family and business.
Like personal life insurance, business-owned life insurance provides a one-time, tax-free payout for your business if you or your business partner die.
The funds can also be used to:
- Give the business cash flow during the transition period
- Pay debts and expenses to help keep the business going while you find and train a replacement.
- Buy out your partner’s shares or vice versa in the event of death.
Top tip for small business owners: Business-owned life insurance should be part of your business plan to help ensure success.
What kind of business-owned life insurance can I get?
There are two types of life insurance for business owners: Term life insurance and permanent life insurance.
What is term life insurance for my small business?
Term life insurance gives your business temporary protection for a set number of years, for example five to 10 years.
The one-time tax-free payout can protect a new business in the event of the death of the owner or co-owner. The payout can be used to cover a loan or for additional cash flow.
Term insurance is the most affordable type of life insurance.
What is permanent life insurance for my small business?
Permanent life insurance gives your business life-time protection. You can build wealth inside this policy, within limits, that you can access while you’re alive.
The one-time tax-free payout can be used to:
- Fund a buyout agreement
- Have additional cash flow
- Succession planning
- Provide business funds that aren’t needed for daily operations
Permanent life insurance is usually more expensive than term life insurance.
Plan how life insurance can meet your family or business needs
Life insurance is about protecting your family, or your business, for the future and helping to meet their needs. As your circumstances change over the years, it’s a good idea to keep reassessing how your life insurance can protect your family or your small business.
Your Western Financial Group life insurance expert can speak to you about how life insurance can help protect your family over the years or how it can protect your business.
Western Insurance has over 40 licensed LIFE INSURANCE EXPERTS across Canada. Our experts are available now in branch or on the phone to help you navigate the life insurance journey that will give you the right policy to protect yourself, your investments, your family, and your business.
Western Financial Group has over 40 licensed LIFE INSURANCE EXPERTS across Canada. Our experts are available now in branch or on the phone to help you navigate the life insurance journey that will give you the right policy to protect yourself and your post-secondary student.
Speak to a Licensed Life Insurance Expert Now 888-594-3105
