Small business owners typically plan for the future, protect their assets and have a succession plan in place but Life insurance is often put in the “too hard” basket. Yet Life insurance can be the most important risk protection a small business owner can purchase as it can help to perpetuate their business.
Life insurance cover has the power to change the course of the lives of the people you care about and the business you helped build in the event that you die or are unable to work due to serious illness or injury.
But your family and your business are important enough to take the time to do the right thing, and in reality Life insurance for a business owner’s needs can be straight forward, inexpensive and an invaluable financial plan.
Business owners may need Life insurance for similar reasons to anyone else (for example as income replacement for their dependants) but also to protect the future of the company. If an owner is suddenly gone due to death, injury or illness, the business can deteriorate very quickly.
There are many unacknowledged costs that come with losing a crucial member of a business. The business may lose clients, contacts or connections that drive revenue. Additionally, there is cost to search, hire, and train a replacement.
All of these costs add up very quickly, and without the proper Life insurance to provide needed cash, the gap between employee loss and replacement can critically injure a small business.
But with the right insurance in place, the surviving business partners or family members will have enough capital to keep the business going and the financial stability to hire a replacement staff member, or to sell the business while it is fully operational, depending on the requirements of the enterprise.
Small Business First members save an average of 20%. * Plus receive your 1st month free if you apply before 31 August 2017.
*The first month free offer is available if you apply for cover before 31 August 2017. If you apply for cover before 31 August 2017, you will not start paying premiums until one month after the commencement date of the cover. This offer is available once only per new customer.
What type of Life insurance does a business owner need?
Life insurance can provide a source of income for your dependants should you die, or are unable to work due to serious illness or injury. But what can make an individual Life insurance cover most effective for a business is added protection against the loss of the business income.
In combination with Income Protection insurance which pays up to 75 per cent of your taxable income for a set period due to illness or injury, you can protect your company with Business Expenses insurance provided by NobleOak. This cover delivers a monthly sum to cover your fixed and recurring business expenses, including rent or mortgage interest payments, the salaries and superannuation of non-income producing staff, telephone, office supplies, and other costs.
It provides a monthly income stream of up to 100 per cent of your fixed monthly business expenses up to a maximum of $25,000 per month.
Most small business owners have credit facilities and NobleOak’s Business Expenses insurance includes payment of the interest component of any loans associated with the business.
No matter what kind of Life insurance cover you buy, make sure you go fully underwritten cover with an established, highly rated Life insurance company. You want to make sure that company will still be around decades into the future when your beneficiaries may need a payout and that they receive exactly what you purchased to give them peace of mind.
This is general advice only. Please read NobleOak’s PDS before applying and click here for information on cost savings. NobleOak Life Ltd ABN 85 087 648 708 AFSL No. 247302 is the product issuer.
Kochie's Business Builders first published this article - visit kochiesbusinessbuilders.com.au for all the latest on small business and to sign up to their inspirational newsletter here.
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