Small businesses are the backbone of our economy. As a small business owner, you know how important your business is not only to you and your family, but also to your employees and your community. It's more than just your family that counts on your business to continue operating. That's why including protection into your business plan is one of the most important things you can do. Life insurance can help protect you and your partners in a variety of ways, and help ensure a smooth transition of ownership, infuse capital into the business, and ensure that all of the sweat equity that you've put into building your business will still be there to benefit your family, not see it crumble.

Here are 5 ways that you can protect your small business with life insurance:

#1 - If you own your business with partners, strongly consider setting up a buy-sell agreement. Why? In a buy-sell agreement funded with life insurance, partners purchase life insurance on each other to ensure a smooth transition of ownership in the event that one of the partners passes away. Life insurance provides the much needed cash to pay their family for their ownership/interest in the business, as well as provide financial support for them and financial stability for the company. Without this protection, where would you be able to come up with such large sums of cash out of the blue, to be able to buy back ownership, continue to run the business, or bring in additional talent to replace the responsibilities that your partner carried out?

#2 - Consider providing employees with group life insurance coverage so that they can have some financial security for their families. 79% of employers believe offering benefits to employees is a critical component of attracting talent, and retaining them. A large part of them feeling more secure comes in the form of making sure that they are prepared for whatever the future might bring. The IRS allows employers to deduct premiums on term life insurance policies of $50,000 or under for their employees. Consult your tax adviser for tax advice.

#3 - A whole life insurance policy builds cash value over time, which can be accessed through policy loans for business needs such as covering payroll, needed equipment, providing incentives or rewards for employees, and much more. Save yourself a trip to the bank and doing all the paperwork to try to qualify for a business loan! Use your own money in your policy to continue and grow your business. (Keep in mind that policy loans accrue interest and reduce the death benefit and cash value of the policy if not paid back.)

#4 - If you have someone within your company that is vital to the success of your business, you need to protect your business from the risk of losing this person with "key person" life insurance. Think about what would happen if one day this person's ideas, talents, or leadership was suddenly gone. What would happen to your business? What type of blow would your customers or revenue take? The proceeds from a life insurance policy can provide the funds to recruit and develop a replacement for the previous key employee, sustain the business while a replacement is being found, and the cash value may also be available for your business as discussed above in #3. Another perk? The coverage is a business asset that enhance's your businesses credit worthiness for commercial borrowing.

#5 - Over time, your protection needs might decrease in your business. But if you have a whole life insurance policy with cash value, it can also be borrowed against to help supplement your retirement income. After years of hard work building your business, you want to enjoy your retirement years, not worry about paying bills.

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When you understand the value of owning and using life insurance to protect both your business and family, you'll wonder why you didn't do it years ago.

Life happens and things can change at any moment. Protect what you've worked so hard to build, and ensure that it will continue to be there to support your family.

Call Tenaya Insurance Services at (925) 322-8073 today!

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