Business Insurance

This insurance protects the business guarantors. By obtaining this insurance you can protect the total and partial liabilities of the business as well as shareholder and or partners. Premiums are not deductible and are paid by the business. The funds that are paid out by liability protection are non-taxable. 

 

Key Person Insurance

 

This insurance can be used to cover a number of people including the sole trader (yourself or your spouse), other partners or joint owners, the principal owner of a one-man company, employees or directors, and/or a key person outside of the business. One advantage of key person insurance is that the premiums are normally tax deductible though you will likely be required to pay taxes on benefits paid out since they are normally assessable income.

 

When owning a business you need to consider your livelihood in the event of injury or disability. Income Protection will work to give up to 80% as a business owner or employee in the even that they become disabled and are not able to work due to sickness or injury. Payments will be made monthly and according to the waiting period (14, 30, 90 or 720 days) and benefit period (2 years, 5 years, or to age 65) selected. You can usually choose between agreed benefits or indeminity options. Premiums can be paid by the business or the individual with the policy being owned by the insured party. Proceeds are assessable and premiums are deductible.

 

As a business owner you need to protect your business in the event that you are sick or injured. With this insurance you can alleviate your worries. This insurance is designed to cover the everyday cost of running a business for 12 months if you are sick or injured. Business overhead protection will pay you monthly after the waiting period of typically 14 or 30 days. These benefits are tax deductible and assessable upon distribution. 

Is your business prepared to meet their outstanding debts in the event of the death of the principle? Often the capital for a business comes from the business principles and from lending institutions such as banks. In the event of the death of the business principal the bank will want proof that they will be repaid the outstanding debt. Sometimes the bank will determine that the loan is not secure and call in the debt. That can cripple a business and destroy the income flowing into your family from your business. Surely you have considered these things before but since you are here reading this you are likely like many other business principals who don’t take the necessary steps to protect their business and their family in the event that they should pass away. If you are in business with a partner, a business succession (buy/sell) agreement ensures a fair outcome in the event that one because disabled or passes away. You would not want to be the one left to deal with business succession if such an agreement had not been reached. It could cripple your livelihood.

 

There is plenty to learn about Taxation of Life Insurance and ownership structuring.

 

Download your FREE ebook on Business Insurance or schedule a FREE first consultation to learn more about how you can protect your business from financially altering events.