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Business Life Insurance vs. Key Man Life Insurance – the main benefits

If you are self-employed or in charge of a small business, what would happen if you were to die? I know, I’m not trying to be a downer here, but it’s important to consider all situations- even those that we may not want to happen.

Hoping for the best and planning for the worst is a solid strategy, and it applies here just as well as it does anywhere. Your business, and you by extension, have a lot on your plate to consider, and business continuity is one of those things that should be considered.

Business Life Insurance

Business Life Insurance is vital for any self-employed business-person. When you are the owner of a business, you have to work hard to ensure your success. Planning is crucial, and planning for the worst is perhaps most crucial of all. If you were to die, would your business be able to cope financially?

Are there, for example, any outstanding business loans that need to be paid? Would the business have to find a new salary for somebody to replace you? Business Life Insurance has your company as the beneficiary through a business partner or other designated person. This ensures that the policy monies are used within the business as needed and safeguards your business for the future.

Some might think: “if I pass away, then does it really matter what happens?” Considering you might have family or employees depending on your business, yes, it still matters. When you own a business, you have a lot of people to be concerned about.

Key Man Life Insurance

Key Man Life Insurance works just like ordinary life insurance, but the beneficiary is the company rather than the family. Typically the company would own the policy and pay the premiums. This type of insurance is incredibly important if your company relies heavily on a certain employee (thus the name).

Consider for a moment how your business would cope if the worst happened and one of your key people died. With a Key Person policy, the company would receive a lump-sum to use as it saw fit. Often, the company would use the money to source and employ a suitable replacement for the deceased, or to supplement the deceased person’s family income.

If you’re self-employed, or your business relies on a few key people to stay profitable, taking out the right insurance policy is the sensible, prudent thing to do. Why take the risk when you could safeguard your company’s future with the right insurance?

While this topic might seem uncomfortable for some, it is important nonetheless. No one likes talking about their mortality, but when people are being depended upon, it is absolutely necessary.

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