There are few jobs in the country as demanding and rewarding as being a small business owner. In our volatile economy, many small business owners work day and night to increase revenue, expand their market share, attract new customers and retain quality employees. In the quest to turn a simple business idea into a thriving business reality, many small business owners focus only on customer growth and revenues but fail to make adequate plans for the future. As a result of this oversight, when a small business owner or key employee passes away, the business itself can fall into financial ruin or become unstable because of lost clients or internal management struggles. Thankfully, having a quality business life insurance policy can help small businesses continue to thrive and succeed even after the loss of a key employee or owner.

There are two main types of life insurance policies that can help small businesses prepare for the future, Buy/Sell Agreements and Key Person Insurance. Depending on the size, ownership structure and nature of your business, it is best to also consult with your company's attorney to evaluate all possible risks, benefits and costs involved and answer legal questions concerning the company's future.

Buy/Sell Agreements are legal contracts that allow for the deceased business owner's shares to be purchased by the remaining company shareholders at a fixed price through a life insurance policy. A Buy/Sell Agreement protects the longevity, finances and stability of the business by preventing the deceased owner's family from assuming ownership of a company they might not have the ability or desire to operate on a daily basis. By using the value of the life insurance policy to buy out the deceased owner's company shares, this also provides the owner's beneficiaries with the cash resources to pay off any personal debts and provide for future needs. A Buy/Sell Agreement can also help protect the business from a distressed sale scenario where the owner's family sells the company for far less than the current market value to pay off personal debts or settle the estate.

The other popular type of business life insurance is Key Person Life Insurance, which provides a company with a death benefit when an essential company member passes away. Because losing a Key Person within a company can be detrimental to future growth and client retention, Key Person Life Insurance allows companies to recruit and train a replacement for the deceased key employee while also minimizing client loss during the transition. Additionally, Key Person Life Insurance helps offset any dips in revenue or production because of the loss of a particular skill set, business contacts or supplier connections.

Aegis, a Houston-based insurance agency, can help small business owners prepare for their future through business life insurance solutions tailored to meet all needs. The friendly and knowledgeable agents of Aegis can create a customized business life insurance solution that protects the longevity and future of your small business and your beneficiaries. Contact Aegis today for more information on business life insurance policies for your small business.