Business Owners: Do you have Income Protection Insurance?
As a business coach I get to meet many business proprietors. Some of them work 60-70 hours per week in their business but few have found the means to having their business work for them. That is to say, a business that they can step away from for a period while it remains profitable - and even grows.
Essentially this means that the owner’s income stream from most business enterprises would dry up if the proprietor was unable to work for a period of time. The stats show that one third of business owners will find themselves at some time unable to work for three months or more due to accident, illness or disablement.
For many small business proprietors, that means 3 or more months of no income plus business overhead expenses to pay. On top of that there may be medical bills .
So how should a business owner overcome this risk? The way I view it there are at least two obvious steps an owner can take:
- Develop the business so that it doesn’t require the owner being intrinsically involved for it to be profitable. A good business coach may be able to assist with this.
- Take out an Income Protectionpolicy .
Income protection insurance ensures that the owner will continue to receive 75% of their income if they find that they are unable to work because of illness, injury or disability. That means if you get hit with cancer, heart attack, depression, a car accident or broken arm, you can be confident that your income stream won’t completely break down . Income protection insurance may save you from bankruptcy, and what’s more, insurance premiums may be a deduction for tax purposes, check with your financial adviser to be certain.
Don’t just take out the first random income protection policy that gets presented to you by your bank. They sometimes contain clauses that will see you paying premiums but never give you the benefit that you expect, so ensure that you read the policy well and understand it . A good insurance adviser who specialises in Personal Risk Insurance should be able to assist you in finding the best policy for your situation and can recommend other personal and business insurances that might of relevance to you.
