Key Person Coverage | Why Your Business Needs It
I recently read an article about a booming business partnership.
Unfortunately one of the partners was killed in a motorcycle accident. The remaining partner has vowed to ensure that the wife and children of his late partner will be financially taken care of as long as he is alive, certainly very selfless and noble.
Take note: This is sometimes an overlooked element of business partnerships.
As a business owner, whether solo or in a partnership, you’re busy and busy is good! Proper long term planning, however, is something every smart business owner has to take time to prioritize.
Are you familiar with Key Person Insurance?
Key Person Insurance is life insurance taken out by a business as the “owner” of the policy, which covers a person or persons, the “insured”, within the business. These people are “key” to this business and losing that person to death or a major illness would create a substantial financial hardship.
Think about how your business or business partnership is set up and whether this type of coverage would benefit your business. Also consider how this coverage could safeguard your family’s financial dignity.
Three questions to consider:
Could your business survive the loss of a “key” person, meaning you or your business partner?
Or have you considered if you were to experience a major injury or diagnosis and could not run your business?
Have you considered how to fund the buyout or loss of your partner on behalf of their family or the survival of the business?
Do your due diligence to identify proper solutions. Take action to secure the longevity and financial strength of your business legacy and ultimately your family’s legacy and that of your business partner.
Key Person Insurance, also referred to as Business Preservation insurance is certainly warranted and well worth the investment!
So what steps have you taken to plan for the financial security and longevity of your business? Or what recommendations do you have for others based on your experience?
Let me know in the comments!
Cheers to your Legacy!
If you need help with securing your financial legacy, retirement, or long term savings plan, connect with me for a no cost or obligation consultation. Or schedule a financial workshop for your staff or a group you are affiliated with.