Insuring the Life of Your Business

Written By: Michael Dollar

Date: September 22, 2015

If people are counting on you, you need life insurance. For business owners, this applies not only to their personal lives, but also to their professional lives. With September being life insurance awareness month, it’s the perfect time to evaluate your needs and make sure you’re covered.


In case of your death, a personal life insurance policy can replace your income and protect your family. The death benefit from a life insurance policy can help your family meet many important financial needs such as funeral costs, daily living expenses and college funding.


Life insurance can also ensure your business will continue, even if you, a partner or a key employee dies. For the protection of your family and your business, consider these questions:

  • How would your company operations be affected by the loss of an owner or key employee? Would your business be able to continue without you?
  • Would surviving partners and your family members be able to work together?
  • Would the business need to be sold and if so, how much would a sale realistically generate?


Business owners need insurance for reasons that are similar to personal needs: for income replacement and to protect the future of the company. The sudden loss of a partner or key employee can be devastating for a business. However, having the right insurance coverage can enable the surviving partner(s) to either keep the business going while searching for a replacement or buy out the heirs of the deceased partner.


In the case of this first scenario, a “key person” insurance policy would be payable to the company and would provide the remaining owner(s) the financial freedom to weigh their options.


In the second scenario, a buy-sell agreement would provide the remaining owner(s) with the necessary funds to purchase the deceased partner’s portion of the business – at a previously agreed-upon price. The money from the purchase goes directly to whomever would inherit the business shares.   


Of course, your specific life insurance needs will depend on your own particular situation. We can help you identify those needs and provide advice on the best solutions based on your unique circumstances.


To find out more, contact our Life Specialist Lisa Sapp at 706-298-2586.


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