Purchasing life insurance for their business and employees isn’t at the top of many small business owners’ priority lists. Many people believe it isn’t required, while others believe it is simply too pricey and out of reach for their little business. Many people are unaware. However, that life insurance may be pretty valuable for any business, no matter how little. Thus, we have highlighted some of the best life insurance for small business owners below.
Furthermore, if you operate a small business, life insurance is crucial. While you may not want to consider what would happen to your company if you died or became disabled, it’s a good idea to make sure you’ve made efforts to protect both your household and your company.
This is where Insurance comes in handy. Indeed, business life insurance provides an essential layer of financial security for your loved ones, staff, and company. Take a look at the top reasons below to understand better why you might need business life insurance.
Benefits of the Life Insurance for Small Business Owners
Pay off your personal and business loans first.
If you use your home or other personal assets as collateral for a business loan, you’ll need the best life insurance for small business owners. For example, consider a bereaved spouse scrambling to pay off the debt to save the house.
It isn’t always possible to liquidate a company to repay creditors. Without the owner at the lead, the company may not be worth anything. When obliged to sell the business swiftly, heirs may be forced to sell it at a discount.
Keep risks to a minimum
When you own a firm, you are constantly exposed to dangers. Hiring and training personnel, especially for management positions or higher, consumes a lot of effort and money. Companies may lose a significant amount of revenue if a key employee dies unexpectedly, not to mention the time and money spent hiring and training a replacement.
This is why many small businesses take out life insurance policies on their key staff. They then utilize the money from the procedure to help with the loss of revenue and the cost of finding someone new if such an unfortunate event occurs.
Increase the retention of employees
Monetary benefits known as “Golden Handcuffs” are used by many small company owners and organizations. This is usually reserved for those in high-ranking jobs, such as administration and above. The “golden handcuff” attractions typically includes enhanced life insurance coverage.
These incentive packages appeal to employees, and corporations can generally give protection worth thousands of dollars for a quarter of the price.
Ensuring that appropriate tax deductions are taken
With an Executive Bonus Scheme, also known as Section 162, you may give your most valuable employees even more reasons to remain with your firm. An executive bonus plan pays the premiums on a top employee’s life insurance policy as a form of compensation.
Employees like it because they have total control over the monetary value and beneficiary selections since they own the process. Furthermore, premiums are immediately tax deductible, which is advantageous to companies.
How Small Business Owners can find the Best Life Insurance
There are specific things to know when looking for the best life insurance for small business owners. This includes:
Know your needs
Is your goal to get suitable collateral for your small business loan, or do you need to protect your family as well? In most cases, business owners purchase one policy for their organization loan and another to protect their family.
As you consider your needs to protect your partner and descendants, think about all that would be at risk if you could no longer care for them. For example, how would your loved ones go to college or pay the mortgage? Will there be enough savings to allow your loved ones to maintain the lifestyle that your income provided for them?
Know how much coverage you should apply for
If your only interest is securing a business loan, your life insurance coverage should equal the amount of the policy you are seeking. However, suppose you also want to provide coverage to loved ones and key stakeholders. In that case, you may want to assess your situation and determine how much added life insurance coverage you need.
The main rule of thumb is to opt for coverage that is five to ten times your annual income. Of course, your current financial goals and responsibilities will dictate the final amount, such as paying a mortgage or sending a child to college.
Know your budget
Get an idea of how much you can spend per month to ensure essential protection. Also, carefully look at your numbers and solve the math. Your monthly fee must fit your budget.
What is your deadline to obtain a business life insurance policy? Is it days or weeks? Suppose you have limited time because you are using this as collateral for a small business loan, and you don’t want to delay the deal. In that case, you may want to focus on finding that it offers instant coverage without a medical exam.
Best Life Insurance for Small Business Owners
As earlier highlighted, the best life insurance for small business owners comes with various merits. Thus, below are some great options in this regard:
For small business owners, Next Insurance offers one of the best life insurance policies. Its processes also ensure that insurance coverage is provided quickly. This is beneficial because small business owners frequently require immediate Insurance in specific scenarios.
For example, if you’re applying for a business loan, you’ll need to present proof of Insurance for the lender to approve the loan. As a result, insurance ensures that you can repay the loan and boosts the lender’s confidence in you.
Next Insurance provides quick internet insurance, which is a perfect option in these situations. It allows you to request an online quote and customizes coverage for your industry, allowing you to complete all stages in minutes too.
TrustedChoice makes it easy to take life insurance for small business owners to the next level with its extensive network of independent agents. The insurance service is excellent because each city has an independent agent, making it easy for you to contact them for advice. Local agents also have a better understanding of your needs, allowing them to recommend the best insurance policies for your company. Furthermore, with an independent agent, you have someone who can assist you alter your insurance coverage to match your company’s demands, such as a growing workforce.
They will walk you through your coverage options and assist you in obtaining the most competitive quotes too. They also look for the most excellent Insurance to fit your requirements. Independent brokers like TrustedChoice are further ideal partners for protecting your company against unexpected and catastrophic expenses so you can focus on growing it.
You can begin with a small amount of coverage and gradually increase it based on your company’s size, niche, aim, and budget.
Surrogacy is dedicated to providing the best life insurance for small business owners to protect your company. It also aids in the management of risks and the expansion of your company.
Surface provides nationwide business insurance solutions for various franchises, small and big businesses, and nonprofit organizations. It’s an excellent choice for small and medium-sized enterprises. Surface provides essential coverage that is both cost-effective and tailored to their specific needs. In all, the firm has suitable insurance options to help you grow your business with safe and transparent coverage.
TechInsurance has one of the top life insurance policies for small business owners. The organization also offers a variety of small business insurance options that cover a variety of accidents, litigation, and losses that your company may face.
The coverage offered by TechInsurance covers the most frequent hazards faced by computer and software enterprises.
Travelers business insurance solutions
The objective of Travelers is to convert risks into benefits for your small business. Travelers offer a comprehensive choice of business life insurance across the sector, knowing that no matter what industry you’re in, your organization encounters risks every day.
The organization does more than deal with the unexpected; it also assists you in preparing for risks, identifying dangers, and recovering faster. The likelihood of unexpected events wreaking havoc on your organization is reduced as much as possible with Travelers.
Frequently Asked Questions
Do small business owners need life insurance?
Yes. Small business owners need life insurance because their family, firm, and employees will be protected against debts and unforeseen liabilities if they pass away.
How much does small business life insurance cost?
The cost of small business life insurance ranges between $500 to $5000 each month.
Is it possible for me to purchase life insurance through my small business?
Yes. As previously said, you can purchase life insurance through your small business.
In conclusion, Insurance comes with various merits. And if you desire help regarding the best life insurance for small business owners, the highlight above will aid you immensely.
Nicholas J. Banks has been an expert in the Insurance industry for over 10 years. He is well-versed in all aspects of insurance, and he has worked on Allstate Ins Group since 2006.
He attended the University of Pennsylvania with an undergraduate degree in Business Administration, followed by a Master’s degree from the University of Southern California to further his career in Insurance Management.
His experience working with many different companies has helped him develop valuable insight into how to succeed in this exciting field, which he now shares through our blog “Pro Insurance Info.”