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Protect Your Business with Critical Illness Insurance

Protect Your Business with Critical Illness InsuranceHow much critical illness coverage does my business need?

It’s a good question and one you’ll need to consider to decide the right amount of critical illness coverage you need best to protect your business against the financial risk of critical illness. As a business owner, you may have thought about what would happen to your business if you or one of your key employees dies, but have you thought about the financial impact a critical illness could have?

Critical illness insurance helps cover costs so business decisions aren’t forced upon you by unexpected illness. And, most importantly, it means that the person who is ill can focus on what really matters...getting better.
The following highlights some issues your business may want to plan for:

  • Replacing a key person while he or she recovers
  • Protecting a business loan
  • Funding a buy-sell agreement
  • Reducing or eliminating debt

Some facts to consider...
It’s impossible to predict exactly how much financial impact critical illness could have on your business. It depends on the recovery time required and who it is who’s sick – you or a key employee. However, here are some of the issues that you might like to think about.

Disability income
Most long-term disability plans are designed to replace a percentage of your income if you are unable to continue working. You’ll need to review how long your waiting time is before benefits are payable, what percentage of your income you will receive, how long you will receive it and what the requirements are for eligibility. For example, do you need to prove you’re unable to do your own work or any work? Your best solution may be a combination of critical illness insurance and disability insurance. Since critical illness insurance pays a cash benefit 30-days after diagnosis*, it can be a great complement to the regular income provided by disability insurance.

Retiring business debt
Check to see if any business loans are affected if you or a key employee becomes sick. Are they payable on demand? Would your bank continue to be comfortable with the viability of your business?

Business overhead insurance
You may want to consider some of the limitations of this solution. How long are benefits paid? Is there a waiting time?

Lost business income
Will you be able to hire replacement staff of the same expertise as the people you currently have in your organization? You may want to consider that learning curves and hiring times might impact your company’s ability to win new customers and service existing ones.

If one of the owners were diagnosed with a critical illness, the partnership may want to consider restructuring the ownership of the business. Would you like to have funds available to allow you to consider a buy/sell agreement?

*Restrictions may apply and some waiting periods are longer than 30 days. Quattro Insurance Solutions can provide details, please call us at: 514.258.2171

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