A few key questions to ask yourself:
Do you have one or more Keypersons in your business? Would their illness or death have a catastrophic effect on the future of the business?
Does your business have substantial borrowings? In the event of the death or illness of a keyperson or business owner, would these borrowings become a burden for the business? Would you like to assist the surviving business owners in retaining control of the business and financially compensating the dependents of the deceased business owners?
What would happen if a business owner died? Many problems can arise for a business when an owner or key employee dies prematurely or becomes seriously ill. In some cases, a business can get into financial difficulty because of a key employee’s or shareholder’s death with surviving business owners having insufficient funds to purchase the deceased owner’s share of the business. Many business owners believe their business partner will look after their families if they die, but what happens if they are unwilling or unable to do this?