Do You Need Small Business Life Insurance?

 

Anyone with a family, who has people depending on his or her income for their living expenses, needs life insurance to help meet those needs in the event of an untimely death.  Proceeds from a life insurance payoff can be used to replace the income lost when the breadwinner passes away.

If you're a small business owner, business life insurance also has an important place in your financial security plan.  While life insurance needs are unique to everyone, if you own a small business and have a desire to protect both your family members and your business interests should you experience a premature death, you need coverage that protects your concerns from every angle.

An unexpected death can upset the stability of both your family and your business from a financial standpoint.  Preparing beforehand with the right type and amount of life insurance can provide assurance that, should you die prematurely, you'll be able to adequately meet your current financial obligations.

One Policy or More?

If your small business is a sole proprietorship, a personal life insurance policy of adequate amount may be enough to cover your family's needs and your business liabilities after your death.  This may be especially true if the plan is for someone in your family to take over your business.

In most cases, however, it would be prudent to have two separate life insurance policies: one for your family and one for your business.  A business life insurance policy can serve a number of purposes:, such as: 

• Paying back loans that were taken out to get the business started or for later expansion.  Repaying these loans is especially important if personal property such as your house was used as collateral.
• Covering the cost of replacing a key employee, including you, the owner.
• Severance pay for staff in the event the business closes.
• Paying off buy-sell agreements.

Key Man (or Key Woman) Insurance

Key person insurance was specially designed for when the owner or very valuable employee of a business dies and financial support is needed to keep things running until the business can get back on its feet.  The number one salesperson, for example, may be responsible for the majority of business and, if he or she unexpectedly dies, it could take some time to replace that person and business profits may decline significantly during this time.  Insurance money can offer stability during this time.

Is the Bare Minimum Car Insurance Okay?

 

Buying a car can be an expensive prospect, especially when buying a new vehicle, and car payments are just the beginning.  There are also various fees that must be paid, such as the cost for getting the vehicle registered and, of course, the cost of insurance.

When buying your Greensboro car insurance, you'll learn that there are two classifications:

1. Car insurance required by North Carolina law for all vehicles operated on public roads
2. Optional car insurance not required by law but recommended for your protection

Insurance Required By Law

All but a couple of U.S. states mandate a certain amount of car insurance for drivers.  Each state has their own requirements regarding types and minimum amounts of coverage required, but the main focus is for bodily injury liability and property damage liability coverages.  Some states also require protection against uninsured drivers and for Personal Injury Protection (PIP) insurance.

In North Carolina, the legal requirement  is for a minimum of $30,000 per person bodily injury liability protection per accident, $60,000 for all persons in bodily injury liability protection per accident and $25,000 in liability coverage for property damage.  You're also required to have the same dollar amounts ($30K/$60K/$25K) in uninsured/underinsured motorist coverage.

Why Carrying Bare Minimum Car Insurance Is a Bad Idea

Required liability coverage is meant for "the other guy" involved in an accident that you cause.  The money paid out goes to help pay towards injuries and/or property damage sustained as a result of your driving errors.  There are two major problems to consider regarding this "bare minimum" coverage.

1. Your Greensboro car insurance liability coverage does nothing to pay for your injuries or property damage.  To be protected for your own losses in an accident you've caused, you must add certain optional coverage to your insurance policy such as collision coverage, personal injury protection (PIP) or medical  payments coverage.
2. The bodily injury and property damage liability amounts required by law are extremely low compared to actual costs typically seen as a result of an auto accident claim.  If an accident you cause seriously injures a third party and they require significant medical services, charges can amount to tens or hundreds of thousands of dollars.  Multiply this by the number of passengers injured from the other car and you can see how woefully inadequate "bare minimum" coverage is.  Experts suggest you should carry five or ten times the minimum required.