Life Insurance for Small Business Owners - What You Need

Most people are aware of how life insurance can protect their families - if you should pass away, your insurance policy would provide your family or other loved ones with a predetermined amount of cash or cash payouts over a specific time period in order to protect them financially.

But what if you're also a small business owner? How can you protect your family and your business?

The answer is business oriented life insurance, which can allow you to protect the financial future of your company as well as your heirs. Many small business owners have their entire life savings invested in their company. Their passing would essentially bankrupt both their families and their business. In this case, everything they've worked for could be lost if they don't adequately protect their company with a good insurance policy.

Business oriented life insurance can be designed with multiple goals based on the size of the company, the person to be insured, and the needs of those left behind should a business owner die suddenly. This is because the business owner him or herself is often an irreplaceable person. If a business owner dies the company itself can fall apart, and employees and heirs can lose all of their assets. But with life insurance specifically designed for business owners the company can be properly disbanded, sold, or funds can be used to open a new one.

You can even arrange your life insurance policy so that your employees can purchase the company after your death, protecting both your company and your family members, who would retain the funds used to purchase the company itself.

If there are partners involved in a business venture, business oriented life insurance can also allow for an automatic buyout should one of them die unexpectedly. This allows for the protection of the business investment as well as the other investors and partners.

If you are a business owner you're likely looking for what's called "key-man" life insurance, aptly named because the business owner is typically the key man or woman in the company.

If you want a replacement to be hired so that your business can continue to function, this is also possible. In this case your insurance policy would provide the funds needed to keep the business running while a new person is found, interviewed, and hired.

In any case, purchasing "key-man" or business life insurance can give the business owner an opportunity to protect their business and their family at the same time. Multiple plans are available today, so it's wise to speak to an insurance broker who has experience with this particular type of coverage.

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