Starting a business from scratch and building it into a thriving commercial enterprise takes a huge amount of time and effort, not to mention blood, sweat and tears.
It should come as no surprise to learn that many entrepreneurs spend as much time worrying about the future of their businesses as their own futures or the futures of their closest relatives.
Searching for ways to secure the future of their enterprises and the future of their families consumes a considerable amount of many entrepreneurs’ time, but if you just finish reading this article, you can reach the same conclusion they all reached in a fraction of the time.
The Clue Is in the Name
Life insurance is designed to insure the life you’ve built for yourself and your family, i.e. to protect what you value most in the event of your passing.
This makes it the obvious place to start when searching for ways to secure the future of your business and your family.
Armed with this information alone, you should be able to focus your search in the right places and find a financial security solution that meets all your needs.
However, if you like doing things in the most efficient manner possible and want to know exactly what you’re doing before approaching insurers and requesting quotes, we suggest that you follow the steps below.
Each one is designed to move you closer to your goal in the fastest and most efficient way.
Defining Your Business Needs
When purchasing life insurance, you can request a level of coverage that’s tailored to meet your specific business needs.
If, for example, you’ve recently started a new enterprise and have yet to pay back the organisations that provided the startup capital, you can purchase a policy with a death benefit that’s large enough to settle your business debts in full.
With death benefits of up to $5m offered as standard by the best insurers and even more generous benefits available on request, covering the startup costs for a small business should be easily achievable.
Defining Your Domestic Needs
Your domestic needs should include the property you call home as well as everything you want your dependents to have after you’ve gone.
If there’s a large mortgage outstanding on your property, you need to make sure that your policy’s death benefit can cover this amount in full too.
It’s crucial to ensure your family has no property concerns after your passing. If there are young children in your household, don’t forget to include their future educational needs in your calculations.
Higher education costs continue to rise, so it’s well worth planning for all eventualities in this regard.
Considering All Possibilities
Anything could happen in the future, and you need to be sure the life insurance policy you choose will be able to adapt to meet your changing needs.
To make sure you’ve really considered every possibility, ask yourself these questions: Where do you see yourself and your family in 2, 5 and 10 years? What do you want to make sure your family always has access to when you’re no longer there to provide?
What’s the worst-case scenario you need to plan for when arranging your life insurance coverage? The whole point of this stage is to make sure you didn’t omit anything important when defining your domestic and business needs.
If you find it hard to catastrophize or you’d simply rather kill two birds with one stone, you may like to consider combining this stage with the next: consulting your loved ones.
If anyone can think of worst-case scenarios that have eluded you so far, it will be your nearest and dearest!
Consulting Loved Ones
Having defined your business and personal needs and done your very best to take account of all the worst-case scenarios you could dream up on your own, it’s time to consult the people you care about most: your immediate family. There are several goals you should focus on achieving during this stage:
- Allowing Every Family Member to Speak – It’s vital that every family member feels they’ve been given ample opportunity to voice their opinions to avoid any discord. This applies to all family members old enough to know what they’re saying.
- Coming to a Consensus – Once you’ve all had the chance to say what’s on your mind, aim to harmonise your opinions and come to a consensus that’s satisfactory to all. Spend as much time as necessary to achieve this goal because it will save a lot of trouble in the future.
- Leaving the Door Open for Future Discussions – Make sure your loved ones know that they can approach you at any time in the future should they think of anything you haven’t already considered. Let them know they should also talk to you if their situations change, and they feel the policy should be updated to reflect this.
- Agreeing to Move Forward – Finally, confirm that everyone is happy to move forward and purchase the type of policy and benefits you’ve agreed to as a family.
You may be wondering why we’ve taken so much time on this stage; it’s because it’s often the hardest and always the most important stage to complete.
Having successfully negotiated your way through this potential minefield, it’s time to congratulate yourself and make plans to start on the final stage: requesting quotations from reputable insurers.
Obtaining Competitive Quotes for Comprehensive Life Insurance Coverage
In this final stage, your primary objective is to obtain several keenly priced quotations from reputable insurers. To achieve this objective, you must first identify insurers who can offer the coverage you need.
You also need to ensure that each company you approach is licensed to conduct life insurance business and is in good financial standing.
If you don’t have time to perform in-depth market research, we recommend confining your search to major insurers with recognisable names.
By taking this approach, you can ensure that the quotes you receive are from well-established organisations with excellent reputations.
