Entrepreneurs are creative, focused and tenacious people. Their minds are constantly on new ideas, customers and profits. Initially, business survival is about hard work and dedication – and any salient points with regard to the protection of the business against distant and dangerous possibility, tend to fade into the background.
But no matter how many responsibilities are swimming in your head, there is one crucial aspect you should never ignore, and that is insurance. For any entrepreneur the value of insurance is almost double that for any other individual – because you are the life and soul of your business, and it is yours. You are intertwined in value and essentiality.
Once you have realised the necessity of insurance, you must be sure to research all the options available, and decide on a deal that covers your particular expectations and needs. The right insurer should customise your insurance package to suit your personal and business situation, as well as future ambitions.
Key reasons insurance is a critical choice
Should you pass away
Death is top of the list when you run your own business. Who will take over after you’ve gone, and how will debts and staff be paid, etc? Obviously you want your company to continue on a path of success after you are no longer in charge – or if you are disabled by accident or serious illness. Without having the required finances to run the business as usual, bankruptcy may loom under these circumstances. Having the saving grace of insurance at this time is vital to keeping your business going despite your absence. After all, consider how much time and effort you have put into bringing your business concept to life. This value should not be allowed to just seep away.
If your investors, partners or a key employee dies or becomes seriously ill, the knock can take the heart out of your business. You need to ensure that you have sufficient capital to keep the overall business operations going while looking for a replacement funder or partner.
Change of leadership
Likewise, once you retire, your company may suffer management-wise, affecting your brand image. If change of leadership causes disruption, then your insurance is there to keep the wheels turning until a satisfactory replacement is found. Continuity is vital to brand image and customer reassurance.
When running your own business you are not only taking care of yourself and your staff, but also your family. Insurance is there to keep your family protected should anything happen to you, and as a consequence, to the business on which your family depends. To ensure your family will continue with the lifestyle you have secured for them, life insurance is an essential component when setting up your business.
Paying down debts
Insurance is key to paying off debts if you have passed away. Currently you may be handling monthly repayments on loans you have taken to get your business going. You can’t allow this to be stopped in the event of your death; your business could be dissolved or your family landed with massive debt. Life insurance is the top card in your pack to ensure that all debts will be taken care of. Depending on the insurance policy chosen, all of your repayments could be covered by your insurer. Your business will continue to operate without becoming a burden on the remaining staff, or your partner or family.
As the owner of a small business, your staff are dependent on you. Having insurance means you will protect your employees from losing their jobs and income. Finances from your life insurance policy can be used to keep the business going, and keep employees paid as usual, including benefits. This aspect can be specifically included in any insurance policy. A company consists of the people who work in it, and keeping the business running smoothly is dependent on the wellbeing and continued motivation of the staff.
Access to cash
Life insurance policies usually allow you to borrow money when needed. Whilst it’s not preferable to do this, there are occasions in your business when you may need cash in a hurry to cover expenses that threaten to overwhelm the business at a critical stage. Having access to quick funding is useful and can mean the survival of your business if caught in a tricky situation.
Guaranteed growth of your money
In our current low-interest environment, a life insurance policy can be the alternative to grow your money steadily but surely. This growth is tax-free, and builds over the years when you do not have to claim. Insurance plans – whether Whole Life or Term insurance – linked to endowment policies is a further resource for protection and value that life insurance can offer.
Peace of mind
Last but not least. The damage that worry does to the human body is well-documented. With good life insurance and other relevant short-term insurance in place, you can sleep easy at night knowing your business will be looked after if anything happens to you. Nothing can replace the life of someone dear, but at least insurance will make things more manageable for your family. And less worry means better health. So it may be many years before insurance may be called upon to do its valuable work!
Check your policies, check your life
VeriFi is an online tool that provides you with an immediate and up-to-date overview of all your life insurance and investment policies by sourcing information from all the major life insurance companies – and presenting the information in a comprehensive report.
With VeriFi you are able, for no charge, to access information on all your life and investment policies at a glance. You are able to check the types of policies you have, the names of the insurance companies providing the cover, the nature and extent of the insurance cover provided – and other vitally important information such as the details on your policies being correct.
To find out more, please visit: www.verifi.co.za