Entrepreneurs, Listen Up! Here’s How Important a Life Insurance Is for You and Your Business
You think you have everything in the world right now – a budding business, a wonderful family, a developing career, and a healthy body. There’s nothing that could possibly go wrong, right? While it is not entirely wrong to be optimistic about things, you shouldn’t downplay the bad things that may happen to you. The truth is, when you pass away, a lot will suffer … except if you have life insurance.
For the Protection of Your Family
Some people don’t immediately realize the importance of investing in life insurance. Others just see this as another thing to add to their expenses. However, believe your finance coach when he/she said that it is more valuable than you ever thought.
One of the most important roles of a policy is that it protects your family once you met your demise. It is only reasonable to secure a plan because you rely greatly on them as you build your business and it is right that you return the favor by making sure they are protected once you pass away.
To Start a Business
As an entrepreneur, life insurance is literally a lifesaver. First, it can serve as collateral, Bestow CEO Melbourne O’Banion explained. This means that you already have a policy prior to putting up a small business. It can be hard to secure a loan and then pursue your passion without an asset that lenders could hold as security, which is what life insurance is for.
If you don’t have a policy yet, the financial institution may ask you to get one, which will become your collateral, before they grant your loan application. Lenders use your life insurance as an assurance that you will and can repay your debts when you die. They will make you sign an agreement that says you are allowing the company to be paid first before the beneficiaries.
To Continue the Life of a Business
One of your fears as an entrepreneur is your business’ instability and financial loss. That’s where life insurance is beneficial. For sure, you have put up a company that you will want to continue even when you’re gone. In the sudden loss, it keeps the business afloat as it can be used to pay the stakeholders during the transition period, Tepsick Insurance owner Yvonne Tepsick explained.
There are many types of insurance available, but you must get one that you most need. First, identify which one do you want to insure. Is it for your small business collateral, your family, or both? Most often, entrepreneurs apply for separate policies. Ponder on the things your loved ones might need if you pass away, like schooling or mortgage.
That said, understand what works within your budget. What you should aim for is a coverage that is between five to 10 times your yearly income. Do the math and make sure you have sufficient money to pay your premiums. Lastly, consider the timeframe you are looking at.
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