Individuals and small businesses have different insurance needs than a larger corporation, so it’s important to know what to look for when you’re shopping around. Here are the key tips to keep in mind if you’re looking for new life insurance or long-term disability insurance:
Life Insurance for Small Businesses and Individuals
Life insurance is vital for yourself and your employees, so choosing the best company and policies is not a decision to take lightly.
Life insurance is there to take care of your family if something were to happen to you. As a small business owner or individual, it’s also there to help cover business loans and other business dealings should your family not want to take over your work if you die.
Here are some life insurance policies you should look into to help take care of your family and your business:
Key Person Insurance – Let’s say you have one or two employees, and each employee has a critical role in your company. If something were to happen to them, your business might tank. Enter key person insurance, which pays the owner of a company if a key team member passes away.
Personal Life Insurance – A personal life insurance policy would be there to help your family financially with business debt and personal expenses. It allows for extra time and protection while your family makes arrangements for your business.
Buy-Sell Agreement – A life insurance buy-sell agreement is set up by business partners so that if a company has multiple owners, the life insurance policies on each partner are combined. This means that if one partner dies, the other partner or partners can buy out the deceased’s family’s share, funded by insurance.
Long-Term Disability Insurance for Small Businesses and Individuals
As a small business owner or individual, the insurance protection you want is twofold: coverage for your business, and financial preparedness for your family.
Long-term disability insurance is available to replace your income should you become disabled and not be able to do your job. This becomes complicated for business owners, because you may not have a set salary to estimate the coverage you need. If you’ve been in business for more than two years, you simply need to provide tax returns for the past two years to gain long-term disability coverage. If you’re making more money now than you were the past couple years, you may need to show profit/loss statements or signed client contracts to increase your coverage amount.
This is going to be trickier if your business hasn’t hit its second birthday yet. You can still provide signed client contracts, or if you had a previous job in the same field, you can get coverage for about 75% of what you made there.
The long-term disability insurance will help take care of your own and your family’s expenses, but your business may need additional coverage. That’s where Business Overhead Expense (BOE) Disability Insurance comes in. BOE disability insurance will help cover your business’ overhead expenses if you become disabled. It will help pay for rent, payroll taxes, salaries, utilities and other costs.
That coverage will give you the peace of mind that your business will be protected in the event of a disaster.