Who said running a business can always be profitable? Running a business comes with its set of risks.
To meet such risks, business owners must have a backup in the form of insurance to cover financial consequences.
Life insurance for business owners is an essential tool that protects the business’s assets, employees, and business’s future. It is legally required for any business owner to invest in protection coverage policies.
Insurance companies have a wide range of selections for you to choose from according to your type of business. If you are a small business owner, opting for life insurance for small business owners will be best suited with pocket-friendly insurance fees.
Whether a business is small or large, for the mitigation of losses, different types of insurance are offered. Life insurance is a survival kit that gives owners peace of mind and a chance to grow, innovate, and succeed.
Life Insurance for Business Owners
Life is unpredictable, businesses take off in an instant, and then crumble to losses without warnings.
To cater to such unpredictability, life insurance for business owners is a safety net. A game-winning strategy for succession planning, loan protection, and employee retention.
It ensures continuity of business in case the owner passes away. The movement of funds is made possible to cover operational costs and debt repayment. The surviving partners can buy out the deceased owner’s shares.
If there is any income or value lost, the family can retrieve it through life insurance. It is also helpful in paying off estate taxes without any sale of business assets.
There are two types of life insurance for business owners:
- Temporary life insurance.
- Permanent life insurance.
Life Insurance for Small Business Owners
An independently owned and operated enterprise is dependent on its proprietors. These proprietors wear many hats.
From handling operations, finance, marketing, and customer service themselves, they are the backbone of the company. Thus, life insurance for small business owners is a means of sheltering against permanent shutdown.
The small business owner can choose from different life insurance options. These policies are structured around the needs, planning, flexibility, and protection coverage.
Business Travel Accident Insurance (BTA)
At times, business obliges travelling. Business travel accident insurance (BTA) is helpful for owners and employees who travel frequently.
It is a way for business owners to show their people are valued and protected, even away from home. Companies either make it an optional employee benefit or fully fund it.
Business travel accident insurance provides financial protection in case there is any mishap (injury or death) during the travelling period.
It is a 24/7 coverage, only applicable on business trips, domestic or international. The coverage includes medical expenses, emergency evacuation, and disability benefits.
What are the Typical Business Owners’ Insurance Rules for Cancellation
A typical business owner’s insurance rules for cancellation, or simply business owners’ policy (BOP), is either cancelled by the owner or the insurer. These cancellations can impact leasing and contracts. And it can hinder business operations if there is a coverage gap.
There are several reasons why a business owner might cancel their insurance policy. Some are listed below:
- There might be a closure or sale of the business.
- The owner might have found another insurer’s rates or coverage better.
- The owner no longer needs coverage due to downsizing or reconstructing.
- The owner is not satisfied with the services or the claim processes.
The cancellation of insurance has a certain set of rules which need to be followed;
Notice Period:
The policyholder has to give a 10 to 30-day notice to the insurance company for cancellation. While the insurer mandates a 10 day notice to nonpayment of premium and 30 days notice for payment of premium.
Form of Notice:
The cancellations must be in writing (via physical mail, email, or online portal). A signed cancellation request form can also be submitted. The policy number and business name have to be stated.
Refunds and Premiums:
If the cancellation is from the insurance company, you get a pro-rated refund of unearned premiums. But if the business owner is cancelling, a short rate penalty is applied (keeping a portion of the unearned premium as a fee).
Effective Date of Cancellation:
On the cancellation request form, the effective date must be mentioned. When the clock strikes 12:01, the coverage ends on the effective cancellation date.
Compliance with State Laws:
Cancellation rules change with location. All business owners have to check local laws and policy regulations. And the cancellations must comply with the specific state regulations.
Essential Advice for Business Owners:
Always have replacement coverage ready to evade gaps in protection. For record keeping, document any cancellation requests. Last but not least, carefully review the cancellation clause for specific terms.
Searching for a Trustworthy Insurer?
At Angle Office, we provide high-quality coverage to our customers. With access to 60 carriers, our team scans the market to find a policy that suits you best.
Contact us for more information. You can request a free quote by contacting us anytime at (215) -383-9353.
For one-on-one consultation, drop by in person at 2600-E, Cumberland St., FL. 1, Philadelphia, PA 19125.
Conclusion
Procuring life insurance coverage is not just a smart move; it is a necessity. And for a business owner, it is a dual tool for succession planning and debt protection.
It builds confidence in safety amongst employees, making them feel valued. Investing in the right insurance today can mean stability and resilience for tomorrow.
