Term Life Insurance - A Safeguard For Small Business Owners
Term life insurance can offer protection for a small business and its owners in surprising ways. If you own a small business, you probably pay property and liability insurance, and are protected against fire, theft, flood and other disasters. But what would happen if you or one of your key employees was suddenly unable to work due to disability - or death? If something happens to you or one of your partners, what happens to your business? Who will pay outstanding business loans and other obligations?
That's where term life insurance comes in.
As your company grows, there are very likely to be one or two key people without whom you'd find it difficult to function. Besides you, there may be an accountant who understands the books inside and out, or the sales manager who drums up most of your sales. By taking out a term life insurance policy on each of those people, you can insure your company against the losses it would inevitably face if one of them were to become unable to work because of death or disability.
Why term life insurance? Especially for a young company, the lower premiums and limited term of coverage make more sense. As the company grows and becomes more stable and successful, a term life insurance policy can often be converted to a whole life key person policy - a life insurance policy that is specifically designed to cover the loss of a key person in an organization.
A term life insurance policy can also be used to cover partners in a business who agree to a buy-sell arrangement. In this case, if one partner dies, the death benefit is used as a 'buyout' to purchase his half of the company from the family. That way, the family of the deceased partner isn't stuck with a business in which they have no interest, and the surviving partner isn't forced into accepting the family as a partner.
Sometimes term life insurance isn't the best option. A whole life policy, for instance, allows you to use your investment in the policy to finance and fund projects, can help provide the basis for a retirement plan, or provide a cushion for the business to borrow against for expansion.
Whether you choose whole life or term insurance, though, key person insurance is a protection that your company shouldn't be without.
To view our list of recommended Life Insurance Companies, visit this page:Recommended Life Insurance Companies.
Carrie Reeder is the owner of eZerk, an informational website with articles and the latest news about various topics.
The Life Insurance Policy And What You Need To Know Before You Buy
Are you looking to buy a life insurance policy? Well, be careful. Life insurance can be difficult to understand and it's easy to be conned into buying something under false pretenses.Recently a prominent life insurance company together with several of its agents paid a huge fine because it permitted the sale of a life insurance policy disguised as a retirement plan. There was little attention given to what a life insurance policy is truly designed to provide.Life insurance is not an investment for your benefit. It's guaranteed income tax-free cash paid to someone you designate in the event of your death. If...(related: Insurance)
Auto Owners Insurance ? Do You Really Need It?
If you think you don't have any need for auto owners insurance, just consider the answer to this question. How would you manage to pay the medical bills of someone who gets hurt in an accident when you are at fault? If you do not have an u...(related: Insurance)
Mortgage Insurance Plans: How Good Is Yours?
Mortgage insurance, to pay off a mortgage, is something you'll inevitably be asked to take out by the bank. Mortgage insurance is necessary so that if something happens to you or your spouse then your loan will be paid off which is good news for your family and the bank. Banks act as if doing you a favour by offering mortgage insurance through their own group plan. Are they?Mortgage Insurance Is Probably A Much Better Deal From Any Number Of Insurance Companies.Mortgage insurance is no different than term life insurance; in fact it is term life insurance. With either, your policy ...(related: Insurance)
New Jersey Car Insurance - What Do You Need To Know About It?
When purchasing New Jersey car insurance there are many decisions you will have to make. You need to understand what kind of car insurance coverage you need and how much you can afford to pay. New Jersey car insurance will have no trouble meeting your needs but you, yourself, must know what you need in insurance for New Jersey driving before you purchase. Just keep in mind that there are many options for Nj insurance available with all the different companies selling insurance.When purchasing NJ car insurance, there are some things the agent is bound by law to inf...(related: Insurance)
State Farm Auto Insurance ? Heres A Few Factors That Determine Your Rate
There are many factors that affect the insurance rate you receive from State Farm Auto Insurance. Various types of coverage are available depending on the price of the vehicle you buy. If you purchase a used vehicle and you don't want or need full coverage, then State Farm Auto insurance will be able to give you a much lower rate than if you have a new expensive vehicle that you are paying out through the bank or finance company.Some of the factors that determine the best auto insurance rate you get from State Farm Auto Insurance include:· Your age. If you are under the age of 25, you will have to pay more for insurance than someone who is older. Most auto insurance companies give a discount for drivers over the age of...(related: Insurance)
Insurance For The Self Employed And Those Seeking Health Insurance
First of all, congratulations on deciding to go out and make it on your own. The rewards and excitement of making it on your own can not be found anywhere else. Now, when looking for insurance for the self employed for a person like yourself, it's important to remember that generally you'll find better rates if you deal directly with the insuring company. There are many confusing options available but the good news is t...(related: Insurance)
Understanding How Your Credit History May Affect Your Car Insurance Coverage
Many personal auto insurance companies consider your credit information when determining how much premium to charge for your insurance. So if you are calling around for new insurance, keep in mind that many insu...(related: Insurance)
Life Insurance, The Universe, And Everything
You may have noticed that life insurance is coming back into fashion. It's true that it may not be the financial term on everybody's lips, but sales of life insurance have been going up, according to the Association of British Insurers. Whilst we may not be saving the...(related: Insurance)
Guide To Life Insurance
Here is a useful guide to life insurance. Simply put, a life insurance policy provides a lump sum payment upon death of the policy holder.In exchange for regular premiums, a life insurance company will insure your life so that when you die, the policy should pay out to protect your dependants from the extra pain of financial hardship.This is particularly important when buying a house, or when you or your family takes on a large, long-term financial commitment. In the event of death, for example, the payment from a life insurance policy can be used to pay off a mortgage.Policies can be arranged on either a single or joint life basis. Depending on the type of policy you choose, your insurer will pay either a lump sum or a regular income which you could use t...(related: Insurance)
Basic Coverage Of Homeowner Insurance Policies
The insurance policy is a package that includes more than 1 type of insurance in a policy. There are 4 types of coverage contained in the home insurance policy.Included are:Dwelling and Personal PropertyPersonal LiabilityMedical PaymentsAdditional Living ExpensesIn this article, Dwelling and Personal Property Damage will be explained:Property damage coverage will help pay for any damage to your dwelling or personal property. Other parts of your home, such as a detached garage, a shed, or any other building on your property are usually covered for about 10% of the amount of coverage on your home.Personal property coverage pays for your personal property, which includes your furniture, clothing, and other personal property.The amount of that insurance coverage is about 50% of the policy...(related: Insurance)
Health Care And Health Insurance Costs Can Be Controlled Through Lifestyle Choices
As you probably know all to well, the cost of healthcare and health insurance premiums continue to increase at levels substantially above the general inflation rate. The reasons given for these extraordinary cost increases are numerous and include: technological advancements in the medical field, increased demand for medical services and prescription drugs, the aging of the population, cost shifting caused by the uninsured and governmental reimbursement rates, state and federal mandates, and costs associated with medical related lawsuits.As individual consumers, we have very little control over some of the factors contributing to the cost of healthcare. However, all of us have control ...(related: Insurance)
Car Insurance Monitoring For Discounted Insurance Rates - Privacy Devouring Monster Eating Us One Bi
For a price, would you let car insurer along for the ride? -asks a USA Today technology story by Kevin Maney. It seemsthat Progressive Insurance and IBM have worked out a scheme topay drivers to be safer - by monitoring their every move intheir own cars, and how fast they make that move, and wherethey park, and what time they drive.The program is being tested in Minnesota and in the U.K. in aprivacy busting program that rewards drivers for keeping underthe maximum speed limits and driving during safer times ofday. It's an interesting twist that is compared here to ashopper reward card that monitors what you buy, althou...(related: Insurance)