If others depend on you for financial support, part of your financial plan should include how you will provide for them after your death. Life insurance may be one of the most important financial products to own, and buying life insurance is one of the best ways to protect the future of your business, employees and family.
Purchasing life insurance is a safety net that ensures financial obligations are met. Life insurance has long been a valuable tool to reduce risk of business closure and to provide the basic financial foundation for continued success. Most business owners recognize the importance of life insurance as an integrated part of maintaining and growing a successful company.
As a former small business owner, Barbara Baldwin, an account executive for JRG Advisors, the management company for ChamberChoice, understands firsthand the value of having life insurance as part of an insurance and financial plan.
“As a business owner, you have the responsibility to see that your business operates efficiently, and at the same time, you must ensure that your employees and family are protected in the event of your death,” Baldwin says. “I wanted to make sure that, upon my death, there would be funds to either terminate the business or have a new business formed.”
Smart Business spoke to Baldwin about the importance of careful planning and adequate life insurance, so that a significant financial and legal burden will be avoided.
So why is life insurance so important?
Many small business owners have their life savings invested in their business. If an owner dies, it is possible the business will close and the family will see all of its assets disappear. The owner of a business holds the most important position in a company and their status should be protected with business owner life insurance. If that person unexpectedly dies, the life insurance can keep a company from bankruptcy. By owning a business life insurance policy, the owner can protect employees, keep the business running and ensure that their family is provided for. Business life insurance can protect both the business and family and help provide for the financial survival of each. Consideration must be given to the interests of the family and heirs as well as the legal aspects of the business insurance.