Many people think of life insurance policies as money that goes to your family members, or other beneficiaries – money to be used for funeral and burial expenses, unpaid debt, and income supplement – once you pass away; however, life insurance policies aren’t just beneficial to your beneficiaries once you pass away. Actually, life insurance policies aren’t just beneficial to you and your family members as individuals.
Did you know that you can purchase a life insurance policy to protect yourself and your business in the event of a major business change? It’s true, and the three business changes that are most common, and crucial, for which you should purchase a life insurance policy include an increase in your business’ debt, a change in the value of your business, and an increasing dependency on a key employee or two for the success of your business.
If your business has undergone an increase in debt, such as a new loan or two taken out, you can purchase an individual insurance policy yourself in order to protect the loan. This is especially beneficial if your business experiences a temporary decrease in profit for whatever reason. The life insurance policy you purchase can help pay for the loan; if, of course, you haven’t already used it to pay back the entire loan.
An increase in the value of your business, and an increasing dependency on a key employee or two, usually go hand-in-hand. Should something happen to a key employee, your business is at risk for falling below the level of success to which it has become accustomed. By purchasing life insurance policies, you can help protect your business against any financial loss that occurs due to the loss of a key employee, as well as fund the effort to hire and train a replacement employee.
Life insurance can help you, your beneficiaries, and the business you’ve worked hard to create while you’re still alive.