The United States is full of small businesses, over 5 million actually, with almost 350,000 in Texas alone. My definition of a small business is less than 20 employees. Most of these businesses have one or two owners that are the key to that business. They know it inside and out. If they were not here tomorrow the business would fail.
Many business owners’ entire estate or retirement plan may depend on that business yet they fail to plan because, “that won’t happen to me. If I die my spouse can sell the business”. It sounds like a good idea but if the business is that person, the value of the business would drop dramatically if the key person was not there
What are the reasons you should help the small business owners out there? There are many. Here are a few:
- Give the family peace of mind. Business owners, investors, and creditors can all rest assured that the business is protected.
- Key man life is very affordable. Typically level premium term can be used to protect the business.
- It is easy to put in place. Key person insurance policies are simple to obtain, with no special filings or IRS disclosures required.
- It’s paid to the business income tax free. In most cases, funds from key person life are received by the company tax free.
- Universal life insurance can be used by the business to accumulate funds for the business or retirement income for the key executives.
- Companies can decide for themselves which employees need to be insured.
- If you don’t talk to the small business owners about what might happen to their business if they didn’t walk in the door tomorrow, someone else will and you will lose the opportunity to help your client and grow your revenue.
Want to learn more about key person insurance? Visit Key Person Life Insurance is Easier Than You Think!
Statistics of U.S. businesses (SUSB) http://www.census.gov/econ/susb/