Business owners need insurance for similar reasons to personal.
Income replacement and to protect the running of the current business and the future of the company. If a business partner, owner or key employee is suddenly gone, the business can quickly deteriorate.
The questions that need to be answered:
- In the event of death or disablement will the business be able to continue to prosper?
- Will the remaining business owners be forced to work with the family members of the departing owner?
- How much will the business pay the departing owner’s estate for his or her share in the business, where does that money come from and at what cost?
- How will the business repay its loans now that one of the business owners has died, is permanently incapacitated or has suffered from a major medical event? And if the business can’t repay the loans, will the bank call for the immediate repayment and renegotiation of personal guarantees given by all owners?
So how do we do it?
Strategies For Life take the time to review your business plans on an ongoing basis, usually at least once a year if not more. It’s a good health check for the business to have the goals and plans reviewed and ensure the right protection is in place for the business and its people.
Client Scenario
Insurance Strategy for multiple business partners
Michael runs a successful business he created with another partner, he is worried if anything happened to either of them the business could continue and how would he buy the business off his partner’s estate. Michael and his business partner now need to revisit the business finances and structure to put in place a plan if something ever happened to one of them.
Our Solution
Strategies For Life created a plan to ensure that the right insurance was in place for the remaining business partners so they would have enough capital to keep the business going should anything happen to either one. Life insurance is commonly used to fund the buyout of partners or shareholders or replace key people in the business if there is an unexpected death.
Strategies For Life can help design the most suitable strategy that suits your circumstances to ensure your goals are reached within your timeframe.