The high costs of insurance can sometimes dissuade business owners from subscribing to it. However, it is important to consider the various benefits insurance can afford a business owner before deciding on its worthiness. Below, we have outlined four insurance strategies that should be considered by business owners before undertaking any decision.
The success of a partnership often relies on the collaborative and cohesive efforts of the partners. Consequently, the death or the physical or mental impairment of one of the partners can have ruinous effects on the business. Insurance can provide an attractive method of funding a buyout agreement to ensure the business survives in the remaining partner's hand. The insurance would allow the beneficiary (the remaining partner) to have sufficient funds to compensate the surviving family properly and fully control the company. Thus, ensuring the business continues to thrive.
This strategy is ideal for corporations as it provides incentives to key employees to remain with the corporation. Under this strategy, the corporation and key employees alike would pay the insurance premiums. The benefit for the corporation is that they are the beneficiary of the insurance. As for the employee, his benefit derives from the guaranteed return of premium. This strategy affords protection to the corporation and motivation to the employee to remain with the company.