Starting a business is not easy. Many businesses fail within the first few years. If you have been in business for over five years and you are doing fine, it is time to think about how you can make your business last and outlive you. You are lucky if your children and other family members are interested to take over from you and if not, you might want to start identifying people who can work in your business and then you develop them so that one day they takeover the running of your business. This way, you are assured of an income for the rest of your life but not only that, your grandchildren might be interested in working in the business and they could end up being employed within the business, long after you might have passed on.

Many businesses die when the founders die because we don’t plan for business continuity.

You can use key person insurance to improve the chances of your business continuing, even after you have passed away.

Benefits of key person insurance are:

• The plan holder / policy owner is your company so the monthly payments are paid by your company and when you pass away, the payout will be to your company
• The proceeds of the policy will enable the surviving owners (if there are other owners / partners) to recruit, train and upskill a new director to take over the role of the deceased owner. This therefore ensures continuity of the business
• Passing on of a key person in the business is likely to result in reduced revenue hence the insurance would enable the business to cover some of it’s operational costs
• The insurance policy will provide financial security to the company and can be used to settle any outstanding debts e.g. the overdraft facility and any other other loans that the company has
• When you pass on as a business owner, you don’t want banks and other creditors to demand settlement of business loans from the deceased owner’s estate. As business owners, you are likely to sign surety for business loans. The insurance will enable the company to settle all loans

If you are keen on the key person insurance, Contact ThuthukaSA or WhatsApp us on 069 245 0228 for more information.