The Importance of Protecting Your Business from Risk
Article By: Mark Chilson, Durand Market President, Insurance Sales Manager
You've worked hard to make your business the success it is today. You have navigated through a multitude of risks including competition, regulation, and the economy. But have you considered what would happen to your business if something happened to you or your partner?
Life insurance is imperative for a business owner because it allows your business to continue to run smoothly even with the unforeseen loss of a partner or executive. There are a few ways life insurance can be beneficial to your company after an unfortunate death.
A buy-sell agreement can be funded by life insurance. The buy-sell agreement is a binding agreement where business owners agree to sell their business interests to remaining owners upon a specific triggering event, including death. If a business partner passes, the death benefit can be used to purchase a deceased partner's share of the business from their estate. Without the life insurance coverage, the owners would have to buy out the deceased member's share of the business from their own savings or take out a loan to do so.
Key person insurance is insurance on the life of the key executive or critical individual at the company. If their death could be devastating to the company, this insurance will provide a payout upon the passing of that key individual. The company will be able to keep cash flowing while finding a replacement for the individual.
Another advantage of life insurance is that the payout can be nontaxable at the time of death.
To learn more about protecting your business with life insurance, contact SFB's Insurance Sales Manager Mark Chilson at 888-254-0615 or email him at mchilson@sfbank.com.
Equal Opportunity Provider. Insurance products offered are: not a deposit, not insured by the FDIC or any federal government agency, not guaranteed by any financial institution, may lose value.
