Life insurance is something nearly every adult should have. It's an easy way to help take care of your family financially if the unexpected happens. It can ease a tremendous amount of stress during an already difficult time.
Posted in Group Term Life Insurance on Tuesday, September 28, 2021
For practice owners, the need for life insurance is even greater because you have additional obligations.
More People Count on You
Life insurance is for your family. They likely rely on the income provided by your practice. Without you, that income could cease entirely. They’ll still have bills to pay — mortgage or rent, debt, utilities, groceries, car payment, childcare, etc. There will also be funeral expenses, and possibly medical bills.
As a practice owner, you may have business loans. Your family would need to cover those payments on top of everything else. Especially if personal assets were used as collateral, the benefits from life insurance could be crucial. Even if your family chooses to sell your practice, that may take time. Life insurance proceeds can help bridge the gap.
Life insurance is for your employees. As a practice owner, you also have employees who count on you. They’ve worked hard for you over the years and will be affected by your death. By making sure the practice is taken care of with appropriate life insurance, you can plan for an easier transition for them.
Lack of Employee Benefits
Practice owners often don’t have the luxury of employer-provided benefits for retirement, disability or group life insurance. You generally have to take care of these on your own, so having enough life insurance proceeds is imperative. Your benefit amount can allow for your spouse to continue retirement contributions and provide a cushion if a disability occurs.
Type of Insurance
There are different kinds of life insurance you may want to consider as a practice owner.
- Personal term life insurance — Term life insurance is an easy and affordable way to provide for your family, as well as many practice obligations.
- Key person life insurance — This is life insurance on key employees to the practice (like you, as the owner). The practice would typically pay the premiums and receive any benefits if you pass away.
- Buy-sell agreements with cross-purchase agreement — If you have a practice partner or partners, you can each purchase life insurance on one another. The buy-sell agreement specifies what happens if you die. For example, your partner(s) could buy your share of the practice from your family. The purchase is funded with the life insurance proceeds.
You have worked so hard for your practice. If something happens to you, you want it to become your legacy or a fond memory — not an added stressor for your loved ones. By planning now, you can avoid more heartaches and headaches for them down the road. Secure life insurance today.