Life insurance for Small Business

Benefits of Life Insurance for Small Business Owners

Everyone’s life insurance needs are different. This is especially true if you’re an entrepreneur who wants to preserve both your business needs and your personal assets if something were to happen to you.  Life coverage ensures that your business and dependents, particularly your family, are financially secure when you pass away. 

Planning for your business’s future should include long-term financial planning for yourself, your family, and anyone else who relies on the business financially. This means thinking ahead to your goals and doing your best to plan for what you want. During the Covid 19 situation, many businesses were adversely affected. With a group plan, if you or one of your employees fall ill, depending on your policy, some benefits can help you with the financial burden.

If there is a buyout (buy/sell) agreement in place, your living members have the right to buy your portion from your estate. This assures that the surviving business partner has sufficient funds (or a portion thereof) to buy out your partners. In the event of the death of one of the shareholders, an agreement will help to decide on how the shares can be purchased at the time of death. This is also known as key man insurance. Insurance for business owners is very important.

Proposed insurance for business owners should reflect the buy sell agreement and how much the shares will be purchased for. This should all be part of the plan from the beginning and if you’re not at the beginning, plan now.

It is advisable for small startups who want to build their company for the long term to purchase their small business insurance when it’s young. Because the cost of insurance will be lower and then they will have a track record with the company while they have less employees.  Less employees=less claims=better rates as time goes by.

Key person insurance is another benefit that is a vital part of the business operation. There are several people in the company whose death could have a detrimental impact, not just the owners. If you can think of a  person who is a vital employee, his/her death or disability could result in a drop in sales or productivity for the company, they are a key person.  This could change over time and this is why it is important to have a broker you can talk with and help you to plan properly with the right life policies and retirement savings and retirement income and the company budget as well as your own.  

An insurance policy on this key employee could help the company in covering the revenue that individuals would have brought in for a specific period of time. Buying insurance on a key employee gives time for the corporation to recuperate, rehire and train a new candidate that can fulfill that position. Or give the key person time to get back on their feet and come back to work.  Essential employees may only be working for a few years, it is usually better to insure them with a term life insurance policy.

Types of Life Insurance

Why is Experior Financial?

At Experior Financial, we made insurance for a business owner easy and provide the best life insurance policies in Canada.  We shop the large market similar to a car insurance broker. We have many insurance partners across North America to help serve our clients well. Our advisors are excellent at providing financial solutions and security to protect your business. Our agents have access to proprietary software to make sure that you get the coverage you need.

Our brokers deal with all the types of business insurance that you will need. Our services help protect your business against any unforeseen circumstances. Experior Brokers have the right experience to help business owners in their financial plans and budgets.

Frequently Asked Questions

There is no set number of employees that is needed. A business owner can purchase group life insurance as a member of the board or sole owner. Our advisors are well informed about employers’ life insurance planning.

Different insurance companies have calculated different costs, depending on the type of insurance and health of the group as a whole.  This is one of the great things about Group Insurance is it takes the risk and spreads it to the entire group.

It depends on the entire situation and how it was set up. However this is a great question for your accountant as they will know your specific details. Our agents are happy to include your accountant in conversations to make sure you get the most out of everything.

 A banking institution can insist a business owner has life insurance to cover a  loan repayment, in case the life of the business owner ends and they have debt with the institution.   Just as you may want key man insurance the bank may want coverage as well.  This is not usually the case but every situation is unique.

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