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As an Entrepreneur, why is Life Insurance Most Important for You?

By PolicyBazaar
  | Published: 10 December 2020 | Last Updated On: 08 February 2021

Buy a term plan and secure your family

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AED 100,000 cover starting at just AED 7/month

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Being an entrepreneur is a cherished dream of many, but running a company comes with its own set of challenges. It is a big responsibility as much as it is thrilling to see your dreams turning into reality. Focusing on ways to take your endeavour to great heights is extremely important but don’t ignore the other more important issues like thinking about the future of your employees just like your family.

A good entrepreneur is one who does not only think about himself but also about the well-being of his employees. Your team of employees is like your extended family and therefore just like you would protect your family, it is your duty to protect your employees’ interests as well. In the event of your unfortunate demise, a life insurance policy will provide financial support to your company thus, stressing the importance of life insurance as entrepreneur.

Assembling finances for your company and other managerial tasks are important, but buying a life insurance plan is definitely something you should invest in. The life cover from an insurance plan is essential as it will be able to keep the company afloat in difficult times. A a result of this, your employees will not be out of a job, there won’t be any salary cuts that put a financial strain on an individual among other benefits. The importance of life insurance as entrepreneur is manifold keeping the interests of your family, your employees as well as your company in mind.

Let us look at some of the reasons behind the importance of life insurance as entrepreneur in detail:

For Survival of Business

As a business owner you are very well aware of the importance of each employee. If anyone gets sick or is on leave for a few days, it impacts the business, especially if it is a start-up. Hence, think about what will happen to your dream project if one day you are gone! The importance of life insurance as entrepreneur is highlighted most in the event of a sudden death. The right life insurance cover will make sure that your partners and employees have a sufficient amount of capital to keep the business thriving.

The same applies to anyone you want to be a part of your team through thick and thin. Offering life insurance covers to your employees or partners will ensure that they will continue to contribute in the growth of the company. Term insurance plans come in handy in case you want to insure teammates who are income generators of your company. It is also most appropriate in case your co-owners are signed as lease guarantors or guarantors of loans for the company.

Protecting the Brand

Building a brand can take years. It takes a lot of blood and sweat and often the brand’s value is directly associated with its owners. Once you decide to retire from making business decisions, however, the company might start losing its credibility or the trust its customers have in it. Thus, in order to not lose money as you step down as a decision-maker of the company, or at least until there’s a suitable replacement for you, an insurance plan will help protect your brand. This is where the importance of life insurance as entrepreneur is seen most vividly when the money from insurance provides the company with enough finances to keep running the company until there is a suitable individual to step into your shoes and take the company to even greater heights.

Protecting the Employees

As someone who is involved in the conception of a company, you are the head of this endeavour. Especially as a start-up, your team members and employees in the small business are relying on you not only for their bread and butter but also for leading the company towards success. The importance of life insurance as entrepreneur is especially visible when you as a company owner, have to protect your employees just like members of a family. If an unfortunate event leads to your death, or a health issue restricts you from getting back to the office, the company might slowly die too without your managerial expertise. The claim settlement from your life insurance policy can be used to keep running the company and ensuring that your employees are paid and are not out of a job. They won’t have to start afresh, looking for new jobs. Thus, book a life insurance policy to protect all those you care about deeply.

Prevent Bankruptcy

Once you decide to step down from your position as the prime decision-maker of the company, your brainchild might hit some troubled waters. If you want to prevent your company from being reduced to dust, and you wish to see it continue to traverse the path of success, life insurance is your only solution. If the company does not have the required finance, whether it is due to the fact that it can no longer garner customers’ trust after you or some other market volatility, bankruptcy is a possible destination.

Buying a life insurance plan that is customized to your needs will help prevent you from having to permanently shut the door of your company, thereby stressing the importance of life insurance as entrepreneur. Your company will continue to thrive even after you are gone!

Payment of Debts

Businesses run on finances and therefore they constantly need to be invested in to run like a well-oiled machine. In the case of market fluctuations, if your company runs into debt, the importance of life insurance as entrepreneur is felt a lot. Ending up in a never-ending spiral of debt is never a good idea for business owners, let alone an entrepreneur. A life insurance plan can help you pay all of your debts in full and take care of your repayments to the lenders, thus pulling you out of the bog of loans.

Enable You to Get Funding

As mentioned earlier, running a business requires a constant source of funding. Businesses need managing at a micro-level and that needs financial support. Moreover, in order to take your business to new heights of profitability, entrepreneurs have to rely on multiple different forms of lending. As a new business owner, one often realizes how difficult it is to source funds from traditional lenders. A loan application by a new business is often rejected due to their lack of stability and recent entry into the market. The importance of life insurance as entrepreneur is once again felt because a good life insurance cover you will be able to save that can be later used as collateral for gaining funds from lenders.

Health Issues

No matter how much you disregard it, but the truth remains that being an entrepreneur is stressful. Apart from all the hard that it takes to set up a new business, the task comes with a lot of stress and pressure. This means that if you are not careful about your well-being, you could easily fall prey to chronic health diseases. High blood pressure, migraines, sleeping disorders are among the few common health issues faced by individuals working under extreme stress.

Thus, apart from the excessive professional responsibility and stress, taking care of yourself should also be your topmost priority. You will understand the importance of life insurance as entrepreneur when the work stress is combined with the stress of hospitalization bills. Therefore, purchase a life insurance cover that provides an illness cover as soon as possible so that you can fully concentrate on setting up your business without a single thing to worry about.

In a Nutshell

While you are in the middle of a business meeting scheduled one after the other, take some time out to think about the people you love- your family as well as the hardworking employees that depend upon you to take the company your collective dreams to the heights of success. A smart entrepreneur is one who thoroughly takes all the contingencies into account and so, you should too!