INSURANCE FOR SMALL BUSINESS OWNERS
Your Company faces three basic concerns about the Ownership and Key Employees that require advanced planning. Actually, all companies and businesses do. These basic concers could become actual financial risks, and they can be addressed with life insurance for business owners. Please, review the 3 fundamental risks outlined below.
1- PROTECTING THE OPERATING TEAM – the human capital component
- What if you died unexpectedly?
- Could the company go on without your leadership, skill and knowledge?
- What if another principal or key employee died prematurely?
- Who would take his or her place and help keep the business running?
- What if the scenario involved disability instead of death?
- Could the business support you or another key person if disability struck either of you?
- Click on Business Continuation Plan for possible solutions to the above.
2- PLANNING FOR OWNERSHIP TRANSITION – the continuation of your business
What if you or another co-owner passes away, and the company is able to continue, BUT the family of the deceased owner wants its fair share of the business? How do you resolve the ownership situation then? And, what if you become disabled – could the business buy your interest? Buy-Sell Agreement Life Insurance could be the answer. Click on Business Continuation Plan for possible solutions.
3- PROVIDING FOR OUTSTANDING TALENT -recruiting, retaining and rewarding key people
Keep your best people – You already know how tough it is to attract talented people to work for you. The best people have many choices for employment and can get what they ask for. If you win the competition for their services, your next challenge is retaining them long enough to get them truly rooted into your firm. You do that by rewarding them beyond their regular compensation, through specific benefit programs.
This usually means going beyond the standard qualified retirement plans, such as a 401(k), or some other defined contribution plan, which have limits on contributions and on payouts.
Non-qualified plans are subject to far fewer government regulations and allow you to establish deferred compensation plans for your Key People, funded by company contributions that are in many cases tax deductible. Many types of defined compensation agrrangements are used throughout the small business world to help recruit and retain the best and brightest upcoming or experienced talent.
FOR MORE DETAILS
Click on the links below for more on business succession ideas for small business owners.
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