An independent financial adviser would tell you as a small business owner it is common practice for a business to take out a business life insurance policy to protect your profits in the event of the death or serious illness of those deemed as invaluable to your company.

Business life insurance can either provide protection for your business itself, for example should you lose a key employee this could make up any shortfall in profits.  Or it can be an important benefit for your employees, thereby helping you recruit and retain the right people.

When reviewing your financial plan it is important to prepare your business to survive any major disruption and to re-establish normal operations as soon as possible after a problem occurs.  You have worked hard to ensure your success so have you thought what would happen to your business if you or a key employee were to become ill or die?

• Would there be an outstanding business loan?
• Would the heirs need to sell assets in order to pay liabilities and taxes?
• Would there be financial resources allocated to finding and training a new employee?
• Would your business partner(s) be able to keep your business running without additional financial hardship?

Business life insurance is therefore a key policy in ensuring that should the worst happen, your business and your employees would be covered.

Business life insurance can be especially important to small business owners, especially partnerships and sole proprietorships. In these situations, business life insurance can help the surviving partner or the beneficiaries of the deceased proprietor have resources to keep the business running as smoothly as possible.

The additional resources will buy the survivors time to make decisions about the future disposition of the company. This may come in the form of outsourcing functions short term or training someone to step in and take over the necessary functions. The resources provided by business life insurance provide time for decisions to be made about whether to continue operations, put the business up for sale, or to shut down the company and sell the assets.

Any further questions on business insurance?

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