By Scott Bilker
Life insurance is important whether you are an employee, entrepreneur or small business owner. There are many expenses that arise upon your death including business expenses, household expenses and, of course, your burial. It is ideal to purchase as much life insurance as you possibly can and draw up a will to delegate funds to the appropriate areas so that your expenses are handled appropriately.
Cover Business Debt upon Death: In the event of your untimely death, there is still a business to maintain and likely debt to be paid. If you do not have someone in place to take over the business, someone has to at least be put in charge of paying final payroll, closing the business and handling the finances of doing so. It is always good to have an attorney in place that can handle this for you. Family members are likely to be too distraught to handle this type of task.
Cover Personal Financial Debts: Everyone has some kind of debt, whether it is a mortgage, car payment, cell phone bill or credit cards. There are always bills that have to be paid. Life insurance can be available for these reasons. Your family members may not have the funds available to cover them. Creditors will go to the next of kin for payment. This means that husbands, wives and children of the deceased will be left with the burden of covering these finances. Not all creditors will write off the balances due to death.
Pay for Funeral Costs: In 2014, the average funeral costs $10,000 to $12,000. This is without special services or an expensive casket. Family members do not generally have this amount of money on hand to cover funeral expenses. Set aside $16,000 for funeral expenses so that everything is covered, including extra copies of your death certificate. As a business owner, you are likely to have several accounts, so a minimum of 15 copies of your death certificate may be needed. There are also hidden cost funeral directors may not tell you.
Provide Financial Security for their Families: Leave some money for your family. Bills can continue to come in up to a year after your passing. These funds can be saved for that or to help your family make ends meet until other solutions are decided upon.
We found more tips on the TermLifeInsurance.com blog for small business owners. Keep in mind, being responsible, even after your death, shows that you have great character. It is never too early to put these financial decisions in place and make sure that both your business and your family are taken care of in the event of your death