Nancy Graham July 19, 2018 Business Wealth Personal Wealth How Much Life Insurance Do You Need as a Business Owner? In my last “No Dumb Questions,” I introduced the basics of life insurance, and how you can use it to play defense on your family’s winning wealth team. But what if you’re also a business owner? Protecting your business and your personal interests can get complicated fast! So what do you do when the interests collide? Believe it or not, decent life insurance can often help resolve all sorts of mind-bending conflicts, ensuring both your business and your loved ones get a fair shake in the end. Have I got your attention? Before we dive in, don’t forget to subscribe to my YouTube channel or connect with me on LinkedIn, for ongoing ideas just like these. Anyone who’s been there will tell you, including me: Running your own business is like having two families to care for at once. Of course you love your real family more than words can say. But you’ve also given a sizeable piece of your soul and your heart to your business. You sure don’t want what you’ve worked so hard to create to come to nothing … especially when other family members, respected colleagues and valued team members are part of that operation. At end of life, when your estate is being settled, there can be any number of business-related challenges that call for an influx of cash to resolve them. To name a few … If your business has appreciated in value, there may be significant taxes owed on transfer to new ownership. You may have family members slated to become or remain shareholders … and others who are not. You may want to ensure your estate is distributed equally among them either way, without having to completely gut your business or personal assets to do so. If you were in a key business role, your remaining partners or new owners may need some extra cash flow during a transition period. Your business may have outstanding loans to resolve. Or you may want to ensure the business wouldn’t need to take on new debt in a transition to new leadership or new ownership. There may be a need for a shareholder buyout. For example, when you pass away, your partners may not want to end up in partnership with your spouse – and your spouse might not be so keen on the idea either. For all of these possibilities and many more, a permanent insurance policy can come to the rescue, with extra, liquid cash at the exact time taxes may be owed, shareholders may need payment, loans may be due, and so on. As I discussed in my last video, permanent insurance costs more than term insurance. But for these sorts of scenarios, it can pay for itself many times over, offering a dependable and relatively cost-effective way to take good care of your personal and your professional “families.” Share: Facebook Twitter LinkedIn Email CIRO Advisor Report
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