Protect Your Business with Term Life Insurance
February 7, 2009 |
Featured, Term Life
Do you have a few employees or run a single-person, home business? Are you concerned about something happening to you or one of your key workers? Fortunately, insurance companies are aware of the potential losses that a business can suffer should someone suddenly pass away. These policies are often known as key employee insurance policies. They will compensate the company should someone die or get permanently disabled where they are no longer able to work. An insurance policy of this type will normally cover the training for a new employee and any subsequent losses in revenue that you may incur had the employee still been working.
Unfortunately key person insurance is not the cheapest type of insurance on the market. Luckily an inexpensive term life insurance policy can be an equally good way to cover your business. In fact, with this form of policy on yourself, you may find that the businesses expenses and debts are covered within the policy should you be permanently disabled or die. A policy like this is essential so that your company does not become a burden on your family. A term life insurance policy on each employee, including yourself, with the company named as the beneficiary may be sufficient to help offset the cost necessary should you have to replace them.
There are a number of reasons that make term life insurance a good option in these type instances. Since you are typically only paying for death benefits, the insurance itself is far less expensive than whole life insurance policies. Insurance agents will try to convince you otherwise, but they simply want you to pay higher premiums. In actuality, whole life policies are really not beneficial unless you intend to hold onto them for twenty or more years to really receive the full benefits. Generally, this is just not reasonable since more than likely you are getting insurance on an employee who has already been with the company a long time and may be eligible for retirement before you ever reach twenty years on the policy.
Just to drive the point home concerning whole life insurance being unnecessary, lets consider a real scenario where you are seeking insurance. If you are getting a key employee insured, you must calculate the expense to replace him. For the sake of argument, we will say this cost is $100,000. A generally healthy person under the age of fifty can get a term life policy for less than about $350 per year. However, the equivalent whole life policy would cost roughly $3000 per year. A drastic difference to say the least. With term life insurance policies, you can expect most premiums to stay low until close to retirement around age 55.
If you put so much into your business, why would you leave its success in doubt in the face of the unexpected? Make sure you get protection! It really is quite affordable.
Tags: business and term life insurance, life insurance to protect business
