- Small Business Owners > Insurance Strategies
Business Insurance Strategies
Insurance strategies play a significant role in many aspects of small business planning whether your business is run as a partnership, sole proprietorship or corporation.
As in personal life, we often find that many business owners are sceptical as to the need for insurance. We show that, early in the life of a small business, insurance solutions most importantly add business stability should circumstances occur that make your business particularly vulnerable. Then, as your business matures, insurance solutions provide tax efficient alternatives for business wealth accumulation, provision of retirement income and ultimately for wealth transfer as you exit the business.
At Transitions Wealth Strategies we spend a significant amount of time guiding and educating you, the small business owner, as to the virtues of appropriate and cost-effective insurance solutions. We often use the case studies, included in our “Library”, to demonstrate the value. It is important to us that you clearly understand the value that is derived from any strategy that we recommend.
Transitions Wealth Strategies provides life, disability, critical illness and health benefits insurance from the major insurance providers. Following are some excerpts on some of the business strategies we typically address using insurance solutions...
Key Person Insurance
Most often, small businesses succeed based on the passion, energy, knowledge and reputation of the owner and perhaps other key employees. It is often these talents that differentiate their business from that of their competitors. Unfortunately if any of these key individuals were to suffer long term disability, illness or death, the business could be exposed to a serious financial threat that, without risk planning, it may not survive from. More Info..
Buy-Sell Funding
An integral part of any succession plan is to ensure that funding will be available to facilitate the purchase and sale of an owner’s business interest should catastrophic death or long term disability occur. Preparation for this event applies whether you are a corporation with a shareholder agreement or in a partnership arrangement. The succession plan should not only fund the ownership transfer but also should provide liquidity for related income taxes. More Info..
Business Expense Protection
In small business, the loss of the business owner due to disability, who may also be functioning as the key salesperson, the key engineer, or the certified professional, if unable to function for an extended period of time, will ultimately lead to lost business revenue. More Info..
Business Loan Protection
As a small business owner you may have difficulty securing the debt financing needed to build your business. Often, creditors will require the business owner to personally guarantee a loan. Personally guaranteeing the business debts may create a personal liability for you, the owner, or your estate if the business is unable to pay. More Info..
Employee Retention
Insurance strategies provide an excellent way for small business owners to retain and reward employees that are key to the ongoing success of the business. As opposed to paying additional salary, thereby increasing Company EI, CPP and WSIB payments and seeing much of the benefit of that salary increase taxed away in the employee’s hands by progressively higher marginal tax rates, implementing insurance solutions can deliver more value to the key employee. More Info..
Business Wealth Transfer
Successful incorporated small business owners will accumulate wealth inside their business. Strategies to effectively grow this wealth and then unlock it for income, retirement funding or intergenerational wealth transfer are important. Insurance strategies are most often used to achieve these goals. More Info..
Business Estate Preservation
Significant tax liabilities can arise at the time of a business owner’s death whether the business is incorporated or not. All of the owner’s assets, business and personal, are deemed to have been disposed of at the time of the owner’s death. Insurance strategies are often effectively employed to address the projected tax liabilities. More Info..
Business Estate Equalization
Often small family business owners are faced with decisions, as they work through their business succession plans, as to how to fairly divide their projected estate between their children. One child may be involved in the family business and poised to carry it on; another child may have another chosen profession with no interest or time to involve themselves in the business. More Info..
