EL DORADO HILLS, Calif., March 23, 2011 /PRNewswire/ -- According to a report published by the U.S. Small Business Administration, small business owners represent more than 99 percent of all employer firms today(1). Over the past 17 years, the same report showed small businesses have generated more than half of all net new jobs, making an integral part of our country's strength and prosperity. Yet despite overall strength in the market, many small business owners have not taken the steps to protect their business, and their family, with one of the most essential safeguards available today—life insurance.
"Small business owners are the heart and soul of our nation," said insurance expert Gary Lardy, CEO of IntelliQuote. "There is an inherent responsibility in running a small business—a responsibility to customers, employees, and oftentimes family. Many small business owners aren't aware of the necessary benefits life insurance provides to protect their business and personal investments."
For small business owners, managing day-to-day affairs can be a 24/7 responsibility. Yet they also have the responsibility to ensure their family, employees and business are protected under all circumstances. A life insurance policy for a small business owner can provide safety and financial security when planning for the future viability of the organization and for their family's security.
"Purchasing a life insurance policy can be the most impactful solution to protect assets," said Lardy. "An investment in life insurance allows small business owners to address a host of scenarios to protect their families' livelihood and provide financial support for their business and employees should something happen to them."
Benefits of Life Insurance for Small Business Owners
Protecting a small business and its key assets can be possible with the appropriate life insurance policy. The life insurance policies business owners should consider include:
Term Life Insurance
An investment in term life insurance protects the assets of the small business owner, the business, family, and employees should the owner or another key employee die unexpectedly. The insurance policy helps provide needed income to allow the business to continue. If there is a business loan, the insurance policy will ensure the lender will get paid back so there are no outstanding financial obligations.
Partnership insurance protects those jointly invested in a business. With partnership insurance, each partner acts as beneficiary of a life insurance policy taken on the other partner. The surviving partner is protected against a monetary loss should the business be terminated. It is possible to insure the value of each partner's share in the business. Should one of the partners die, funds would become available to manage the debt owed to the estate of the deceased partner.
Key-Person Life Insurance
Key employees are one of the most valuable business assets. The question a business owner must ask is-- if something happened unexpectedly to a key employee, would the company be able to function and continue to service customers and employees? Key-person life insurance allows a business to use proceeds from the policy to help offset the costs incurred with the loss of productivity and the cost of hiring and training a new person in the same role.
Fund Buy-Sell Agreements
A Buy-Sell Agreement is an agreement between two parties, usually business partners, which allows one partner to buy the business should one of them die unexpectedly. Buy-Sell Agreements ensure that, should an owner pass, the remaining business owners have the funds to buy the company interests of a deceased owner at a previously agreed upon price. The owners assume the business interests/shares and the family receives the financial proceeds from the buy-out.
Group Insurance Offerings
Life insurance can also be utilized as a selling point for small business owners. Small business owners can provide employer-sponsored life insurance as a benefit to their employees through a group life policy. Employer-sponsored plans can also be presented as a tremendous benefit for prospective employees. Should an employee leave the company, his or her plan can be converted to an individual policy.
Tax Implications, Estate Planning Facilitation
Certain life insurance policies help reduce the impact of estate taxes on small business owners' beneficiaries, as well as help to protect the business should they lose a key employee or partner. Some forms of life insurance may also be utilized as a tax-deferred investment. For example, if there are partners in the business, the business can purchase life insurance policies for all partners, pay the premiums from the company, and this expense can be used as a tax deduction.
Expanding Business or Protection against Difficult Economic Times
The cash value in a policy can be used when a small business owner would like to expand his/her business, or when times are tough. For small business owners, life insurance can be a tremendous benefit as assurance—should anything unfortunate occur to a business owner or key employee—that tax implications are kept in check, and the business can survive and thrive.
"Small business owners consistently encourage innovation and inspire creativity," says Lardy. "They deserve the opportunity to protect themselves and their businesses with a life insurance solution that helps shield their assets."
For more information, contact www.intelliquote.com.
A leading online life insurance agency since 1997, IntelliQuote provides customers simplified, private access to compare, shop and buy life insurance online, including term life insurance quotes. IntelliQuote offers clients a wide selection of competitive products from A-rated carriers, supported by licensed agents. This simplified approach makes purchasing a policy easy and straightforward while providing a savings of up to 70% per policy. IntelliQuote is a member of the LIFE Foundation and is committed to ongoing consumer education. For information on how to estimate how much coverage an individual might need, visit www.intelliquote.com.
For more information, contact www.intelliquote.com, or 888.883.6855.
(1) U.S. Dept. of Commerce, Census Bureau and Intl. Trade Admin., Advocacy-funded research by Kathryn Kobe, 2007 and CHI Research, 2003, U.S. Dept. of Labor, Bureau of Labor Statistics.