A life insurance policy is a valuable addition to your business strategies.
The unpredictable nature of the economy makes it difficult to predict changes. This is why we need to be careful when implementing strategies for business expansion. To be able to recover quickly after a unforeseen event, you need to create a customized plan. An annual plan review is an easy way to assess your insurance policy and identify requirements.
Long-term insurance plans are more useful during unpredictable times.
Cash money can be a buffer against recession and keep a business afloat during an emergency.
Plan finances do not depend on your credit score, and settlements are also possible at a favorable rate.
The surviving benefit of an essential employee’s plan can be used to purchase that person’s shares in the business, ensuring security for the business.
COVID-19 has actually had a significant impact on the business world over the past couple of years. Businesses that offer high-demand items, such as personal safety devices, hand sanitizers and masks, saw their profits and total assets soar, while other businesses, like restaurants, struggle. The surviving benefit of life insurance is more important than ever in planning for a business’s succession in the event of an unexpected death of an owner or key employee.
Here are two actions that you can take to examine your insurance policy:
Look for and evaluate any significant changes since the last evaluation.
The service assessment changes, especially for businesses where assessment may include a number of earnings. If earnings are significantly higher, more insurance may be needed to ensure that the surviving entrepreneur is able to acquire the passion of a decedent.
Changes in the percentage of ownership for all types of owners. These updates may require a change in protections. A merger or purchase can also require additional insurance coverage, or the transfer of an existing policy.
Changes in the family scenario of any owner, such as separation, death, disability or medical problems. This includes scenarios that impact both the owner and his/her family members.
Staff members who are essential to the company’s operation, for example those who leave or retire. Should a program of motivation be developed to retain or bring essential staff?
Ask about the protections of your existing life insurance policies:
Existing plans are they performing as expected? Plans can be at risk if they are not performing as expected.
Are the plans available?
Do you still classify recipients in a precise and ideal way?
Is the company submitting Form 8925 each year with its tax return to ensure that the death profits are not gross income?
You can still complete this review over the phone if you are unable to attend a meeting in person. Call your agent to have your business’s life insurance profile reviewed. You can help ensure that your company is well protected.
