To some business owners, purchasing a life insurance policy can be a low priority compared to the many investment opportunities available that can help increase their wealth over time. Who needs insurance if you have lots of money right? This article will explain why even the most successful entrepreneurs have large life insurance policies.
Successful business owners understand the need to do a SWOT analysis (strengths, weaknesses, opportunities and threats). This analysis will identify opportunities to capitalize on and risks that need to be mitigated. However, what some business owners don’t consider as one of the biggest threats, is their ability to operate their business in the event of an accident or illness. Can your business survive without you managing its direction? Will your dependents suffer with large medical expenses or the prospect of stepping into your shoes?
Here are few good reasons why successful entrepreneurs have large life insurance policies:
Preserving your legacy: You worked hard to build your dream, it would be a shame for your business to suffer if you were unable to continue working, even for a short period of time. Life insurance can transfer this risk and cover costs that could be a liability to your company.
Loss of a key employee: Every business has employees that are the backbone of the business, they possess knowledge and skills that are difficult or expensive to duplicate. Maybe this person is you! A key person life insurance policy can make it easier to hire and train new staff and cushion the business against the negative effects of losing such an employee.
The risk of debts: Every business needs financing and bank loans can threaten the existence of a business if they are unable to be paid. While most loans have an insurance requirement, this insurance is designed to protect the bank in case you are unable to repay the loan. An effective life insurance policy can help your dependents cover your business debts and provide an infusion of cash to help the business continue in the event you are unable to continue your duties, or continue them in a limited capacity.
Life insurance is designed to transfer risk to a large pool of contributors, rather than one individual taking all the risk. Savvy business owners realize this and ensure their business is not at risk if something happens to them.
If you are interested in protecting your business against an unknown future, contact the experts at DENT Benefits to learn why successful entrepreneurs have large life insurance policies.
The information in this material is derived from various sources. Material is provided for general information and is subject to change without notice. Every effort has been made to compile this material from reliable sources; however, no warranty can be made as to its accuracy or completeness. Before acting on any of the above, please contact us for benefit, pension and insurance advice based on your corporate or personal circumstances.