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Life Insurance Protects You, Your Business and Your Family

Unless you plan for the unexpected, all you've worked for could be lost.

If you died tomorrow, what would happen to your business?

That’s not a pleasant thought to be sure, but it’s a question that all small business owners must consider. You and your family have no doubt invested a great deal in this business. But unless you plan for the unexpected, it could all be lost. And your survivors may be powerless to stop it.

That’s why small business owners should consider business life insurance to ensure the financial security of their families, and the survival of the dreams they devoted their lives to building. You can tailor the policy to the needs of your business. For example, a policy will provide for the successful liquidation of your financial interests in the business for the benefit of your heirs.

FYI

Santa Barbara SCORE meets every Wednesday, from 8:30-11:30 a.m., at 402 E. Gutierrez St., Santa Barbara. No appointment is necessary. For more information, call 805.563.0084, visit www.santabarbarascore.org or register for counseling online at www.edmisscore.org/0166.

In addition, the Santa Barbara SCORE Chapter publishes a great tool for aspiring entrepreneurs, How to Start a Business in Santa Barbara County.

If employees are scheduled to take over ownership after your death, your policy can specify that the funds be used to help them purchase the business. If the business is to be sold outright, it will most likely need working capital during the transition period. The availability of a ready source of cash for that purpose will make the business that much easier to sell. Assets usually are discounted during such a sale and the availability of insurance funds will help the heirs.

If you have a business partner, you should each have a life insurance policy that enables an automatic buyout of the interest of the deceased. This will protect the estate of the deceased, and ensures the continuation of the business.

Because the legal, administrative and tax aspects of life insurance are complicated, you should seek the assistance of a qualified insurance agent to discuss the level and type of life insurance that will best serve your needs. Also make sure your attorney and family members are consulted before committing yourself to a policy.

You can plug into a wealth of business know-how by contacting your Santa Barbara chapter of SCORE “Counselors to America’s Small Business.” SCORE counselors offer free, confidential advice about every aspect of starting, running and growing a successful business, even mentoring.

 

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