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I was 40 when I got my first policy. What if I knew sooner? How much money would I have in it today? What would life be like if I don't have to borrow any money from the bank? How much would my family have when my time is up?

Many would start thinking about life insurance when they start a family, purchase a new home or building retirement income. When you are an entrepreneur you have a legacy to protect and other people’s financial needs to consider. The unexpected can happen at any time, and when it does, it can be devastating for your business. You probably have a lot of personal assets tied up in your company. If something were to happen to you and you were unable to continue running your business for whatever reason, the repercussions could be disastrous.

Even if you have no family or dependents to provide for after your death and you aren’t the primary breadwinner in your home, life insurance is still an important asset that can help protect your business against unforeseen circumstances. Let’s take a look at why that is and why I should've started earlier

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Business Loans

What is a collateral assignment of a life insurance policy? When you borrow money, the lender can take possession of an asset of yours, such as your life insurance policy. The goal is only to satisfy your loan obligation. Once the debt is paid off, you regain control of the asset. But, what if you have enough money in your own bank to borrow from?

There are two main types of policies: term life and permanent life. Term life is the most common type of policy you will see, and it’s very simple. You pay a monthly or yearly premium and, in the unfortunate event that you die, the policy pays out a specified amount to your beneficiaries. There are also living benefits. It would pay a lump sum for chronic illnesses such as heart attack, cancer, stroke. And if you are not able to do 2 of the 6 daily living activities, bathing, dressing, getting in and out of bed or a chair, walking, using the toilet, and eating. Not to be confused with stand alone long term care insurance or rider. Yes it is different! Follow us on our social. Learn and read together with us

Permanent life insurance, on the other hand, provides coverage for your whole life. The premiums are much higher since you are paying to build up a cash value like with an investment account. Permanent life insurance is like an investment in yourself. That cash value you put in can be used to help pay for the premiums if you’re unable to do so in the future for whatever reasons. Down payment for a home, buy a car, a boat, invest in stock market, web3, or fund your startup. Permanent life insurance is the better option for people who are especially risk-averse, but it might not be the best fit for you if you’re trying to save up money quickly. Wouldn't you rather pay yourself back than the bank?


Why Should You Get Life Insurance as an Entrepreneur?

Like we’ve already discussed, life insurance can come in handy if something happens to you, be it an accident, a sudden illness, or death. If you pass away, your business could suffer greatly. The loss of your leadership and management could cause a major disruption in productivity, employee morale could decline, and your company could potentially go under if you aren’t able to keep it afloat. Life insurance can help mitigate the damage that could happen in the event of your death. It can provide your business with the necessary funds to pay off debts, pay out any remaining salaries, and continue operations without having to close its doors.

If you die today, would your spouse and/or children could be left with a huge burden of debt? Mortgage payments, car payments, student loans, utility bills, day care and all other expenses could be too much for a single income to cover. It can help relieve that burden by providing your family with a lump sum of cash after you die. That money can go toward paying off bills and debt and help set your family up for success.

But seriously, wouldn't you rather borrow from yourself than the bank? Do you know that the cash value of your whole life insurance policy will not be taxed while it's growing? That's right! Your money will grow faster because it is not being reduced by taxes every year. Does this means the interest you make on your cash value is applied to a higher amount? YES!

What would you rather do? Put money in the bank or life insurance?

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Key Things to Know

Your health is extremely important, particularly if you own your own business. Because health is one of the determining factors in how much your life insurance policy will cost, you’ll want to be sure you’re in good health before applying for a policy. Premiums are based on a variety of factors, including your health, age, and health history. Term life insurance only lasts for a set period of time, typically 10, 20, and 30 years. The older you are when you buy the policy, the more it will cost. 


The Bottom Line

Life insurance is for entrepreneurs. You might also want to see why the insurance industry could be for you. Aren't you curious? Are you an entrepreneur?



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