Mind your own business!!

My mother never told me running a small business was easy. In fact it went something more like, “wouldn’t you be better off getting a real job?”

Whether you are in business for yourself, or work for someone, your future can be in jeopardy if you, or they, have not adequately protected the business with business life insurance. The untimely death of an owner, partner, or key person in a business when there is no business life insurance such as a buy/sell insurance policy or key man insurance in place can be the beginning of quick end.

We often think of life insurance just in terms of protecting our family from the loss of income if a parent should die, or in terms of final expense or burial life insurance. The unexpected death of a business owner or key person can have a dramatic impact, not only on their family, but on the employees of the business and their families.

If you own a business and don’t currently have business life insurance, meet with an independent life insurance agent soon and review the structure and financials of your business. The agent can then make recommendations and provide insurance quotes that help your business become a legacy to your family and your partner(s) and employees, rather than a loss to them all.

In most cases you will want to look at term insurance or possibly return of premium term insurance rather than universal life or whole life. Why term insurance? The truth is that most businesses change too rapidly to make locking in even the longer terms or permanent insurance. A more prudent approach is to look at each aspect of your business and consider the proper term length. It may take more than one life insurance policy, but with term insurance being as affordable as it is, you should certainly be able to protect your business without significant impact on your budget.

So, mind your own business! A good steward of a business will ensure that the business will survive them.

What happens if your business partner wakes up dead today?

Needless to say, these kinds of events can definitely present you with some challenges. Partnerships are tricky enough. Without the right business life insurance or buy/sell life insurance policy in place, the partnership can remain tricky long after the deceased partner is gone.

In general, a business partner’s portion of the business would be passed on to his or her family upon death. This can take place in a few ways.

One scenario is that the spouse or a surviving child of your partner would move into the partner’s old position and continue on kind of like nothing ever happened. A problem can arise if that spouse or child isn’t qualified to do the job, in which case you would probably prefer they weren’t there. A problem can also pop up if their aren’t any family members who want to step in, but they can’t afford to just walk away from the income generated by the half of the partnership they used to enjoy.

A buy/selll life insurance policy, usually a term insurance policy, can alleviate the problem. Each partner would carry an amount of insurance adequate to buy out the other partner’s portion of the business. That would provide the funds necessary to formally purchase the partner’s interest in the business from the deceased partner’s family.

So, what happens if your business partner wakes up dead today? Before that happens, get together with an independent life insurance agent and get some life insurance quotes today. Discuss a binding agreement with an attorney. You’ll be surprised how a little money can defuse a potential time bomb.