Ensure your company can survive without you
Your company's financial health is the result of sound planning. A sudden death could threaten business continuity, putting your company's survival in jeopardy. Life insurance and a shareholder agreement can help you face the significant financial consequences of death on your company, family and loved ones.
Keep your business operating smoothly
Death of a sole proprietor
When a sole proprietor dies, the company is transferred to the deceased's estate, which is usually the family. If one of the children wants to take over the company, what happens to the other children's inheritance? Life insurance is the ideal solution to ensure fairness within the family, because it provides a benefit for the children who will not be taking over the business.
If there's no one in the family to take over the business, taking out life insurance for the owner can allow a key employee to obtain the funds needed to buy out company assets left to the family.
Death of a key person
The death of a key person can severely compromise company operations. Taking out life insurance for this person can help you maintain company operations by allowing you to:
- Hire a replacement until a successor is ready to take over the position
- Compensate for a loss of expertise
- Cover operating costs
Meet your financial obligations
Whether you're self-employed, a business partner or owner, credit insurance allows you to protect your business plans and feel confident about the future, even in the event of death. Credit insurance (Loan Insurance, Line of Credit Insurance and Credit Balance Insurance - Business) covers you in the event of death, since it:
- Pays off your insured loan balance, removing this financial burden from the estate or business and making it easier to transfer your assets to your loved ones or a third party
- Allows the estate to dispose of the entire inheritance, since it does not have to worry about paying off the loan
Make transferring the business ownership easier
To prevent potential conflicts, a shareholder agreement is an essential document that can help you prevent or resolve problems that could arise, especially after the death of a shareholder.
Protect your family's financial security
In the event of your death, your estate could decide to keep the company, sell its shares or liquidate company assets. Your life insurance coverage can help prepare you for anything by helping to:
- Pay any taxes owing on death following liquidation or transfer of taxable assets
- Maintain your family's lifestyle by providing replacement income
- Ensure fairness among all family members in the event of business ownership transfer
- Finance the difference between the sale price of shares and their market value in the event of unfavourable economic conditions or quick sale