Via LinkedIn : 6 Questions every business owner should consider
Question No. 1: Do you have a properly funded buy-sell agreement, in case there is a loss of a shareholder due to death, or critical illness?
Life insurance can provide an instant buyout fund when there is a triggering event. Either the company or co-owners can own policies on fellow shareholders and use the proceeds to buy out the interest from the deceased’s family. Life insurance can provide the assurance that surviving owners can maintain control of their company and protect their operating cash flow from the buyout requirement.
Question No. 2: Do you have business loans that you personally guarantee?
If so, your own personal assets could be at risk in the event of a business default. 48% of businesses that fail, fail due to a critical illness. Life insurance in the amount of any business loans can help mitigate that risk.
Question No. 3: Can the business afford to pay you a salary if you are unable to work due to a prolonged sickness or injury? Additionally, if your role is critical to the business, how would the company afford the services of a replacement executive?
Critical illness insurance can pay you a lump sum to replace your income if you were diagnosed with any Terminal, Critical or Chronic Illness.
Question No. 4: Who are your most valuable employees? Would your business survive if you lost any key people or shareholders?
A company that relies on two or three key people to generate a majority of sales, would be significantly impacted by the loss of any of those employees. How long would it take before a new hire could replace the lost revenues and resulting profits.
Question No. 5: Have you considered “golden handcuffs” to create additional incentives for your employees to stay?
Life insurance could serve a dual purpose; providing your business protection from loss and acting as an incentive for key employees to stay with your company.
Question No. 6: Do you have a retirement plan in place?
Life insurance policies offer a unique combination of death benefits and tax advantages available in no other financial product. These advantages include tax deferred growth as well as the potential to access policy cash values without paying taxes via withdrawals and policy loans. Additionally, in most states, cash value inside a life insurance policy is protected from creditors making it an especially effective tool for business owners to use to grow their assets.