Reasons Why Every Solopreneur Should Have Life Insurance
Larry Carlin
Providing Peace of Mind for Families and Businesses. We help you Avoid Financial Disaster by helping you become debt free, providing protection against loss, increasing income and protecting your assets
Life insurance is an extremely important vehicle that has many uses if you as a business owner, self-employed individual or solopreneur. Here are a few reasons why you need life insurance if you work for yourself.
1. Protecting your family finances.?If you have children, a spouse, partner, or aging parents who depend on your income, their finances could suffer significantly without a life insurance benefit. The lump-sum payment to one or more of your beneficiaries would allow them to pay any expenses, such as your funeral, everyday bills, and future goals like going to college or buying a home.
2. Qualifying for a business loan.?In many cases, you must have life insurance to qualify for a business loan from a private lender or one backed by the?Small Business Administration (SBA). You typically need a term policy that would cover your loan repayment period. Your lender has significantly less risk when you have a life insurance policy to safeguard your liability.
3. Serving as collateral for a business loan.?Life insurance can also serve as collateral for a small business loan. The policy pays off your loan if you die, and the remaining benefit goes to your beneficiaries. You typically need a permanent policy with a cash value that could get assigned to your liability.
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4. Protecting your business partner or key man.?Life insurance should be a critical part of succession planning if you want your business to continue operating after you're gone. Whether you're a solopreneur or have?key people, such as partners or employees, life insurance helps keep your business running until a successor can take over or your heirs sell the venture.
5. Selling your business share.?If you own a business with partners or have key employees, life insurance can be an essential tool for allowing them to buy out your heirs. Instead of your family taking over your business, they could sell your share to one or more successors. The company could continue running without you, and your family would receive a lump sum or structured payout.
6. Protecting you from Critical or Chronic Illness.? To protect you from major critical or chronic illnesses such as cancer, heart attacks or strokes, having a policy with living benefits attached allows you to gain access to a lump sum of funds that can be used to pay for medical expenses such as seeking alternative treatments that aren't covered under health insurance or to pay for day to day expenses while you recover.
7. Protecting you from Critical or Chronic Illness.? Certain types of life insurance policies allow for you to access the cash value of the policy in the forms of loans to help you fund purchases such as equipment or to just pay for business expenses in the case of downturn in business such as the past couple of years with the covid pandemic.