Considering the current Indian market scenario, it is seen that nearly 41% of the Indian business entrepreneurs do not maintain any insurance coverage. This implies that they do not maintain a healthy financial portfolio that can help them during challenging circumstances for self and their families. The situation turns graver if the business owner happens to be the sole breadwinner in the family.
Business incomes are neither guaranteed nor regular. So, it is all the more important to secure your future and that of your dependent family members, without hampering your current financial status. This requires careful planning and discipline from early in life.
Considering such unpredictability, life insurance seems to be a perfect solution.
Importance of life insurance for entrepreneurs
As a visionary business entrepreneur, you must consider protecting your dependent family members under all circumstances, irrespective of the business situation. In this respect, life insurance will save your day:
- Protecting the financial future of your dependent family members:
If you are the sole earning member in the family, then ensuring the financial future should always be your chief priority. They all rely solely on your income to fulfil their financial targets, lifestyle, and other everyday family expenses. Insurance acts as a safety shield during rainy days.
Sometimes, despite proper planning and execution, life throws lemons out of the blue. Life insurance will help you handle such unforeseen events, like death, accidents, critical illnesses, etc., and handle such crucial circumstances.
- Strong business shield:
Running any business often proves to be quite challenging. Any unfortunate event like a machinery breakdown, severe loss due to various circumstances, etc., may hit you at any point. This often results in severe financial setbacks, jeopardising your financial status. However, if you have a reliable insurance plan, you can handle such situations more efficiently.
With proper insurance coverage, you can continue focusing on business growth without getting impacted by sudden, unforeseen events. In case you face business loss due to a massive fire breakout, fire insurance will help you steer clear of the smoke through effective management.
- Retaining and attracting worthy employees:
As an entrepreneur, you must note that your employees form the backbone of your organisation. You must ensure that you exercise proper care and protection. This is not only your moral obligation, but a significant business decision. A reliable insurance coverage can deftly handle various employee issues like life risks, disability, compensation, etc. With this sort of planning, you can earn respect from your employees, especially if your insurance offers family protection. It promotes a healthy and reliable work culture that protects and nurtures them.
- Business expansion:
As an entrepreneur, a reliable method to ensure wealth building is to invest in a competent life insurance policy offering maturity benefits like ULIP, money-back plans, endowment plans, etc. You can utilise this amount to ensure business growth and expansion, infrastructure upgradation, etc. This will eventually aid in better employment strategies and economic progress.
Types of life insurance plans that entrepreneurs must consider:
Certain typical insurance plans that offer promising investment opportunities include the following:
| POLICY TYPE | DESCRIPTION |
| ENDOWMENT PLAN | This combines protection and savings. With this, you can systematically invest in low-risk financial tools while ensuring guaranteed returns. After a specific tenure, either you or your nominee will receive the plan benefits as per the circumstances and the plan terms. |
| MONEY-BACK PLAN | This combines the advantages of both investment and insurance, offering guaranteed returns at specified intervals. A pre-defined percentage of the sum assured or the yearly premium is paid at regular intervals, irrespective of market performance. |
| ULIP/UNIT-LINKED INSURANCE PLAN | This financial tool is a unique combination of insurance and market-linked investments. A part of the premium is invested in offering life insurance cover, while the remaining is invested in market funds, potentially yielding promising returns. |
- Protecting the business:
As a business owner, you must ensure optimum protection of your entire business infrastructure. A business owner’s plan can save your day here.
- Protecting the business from liabilities: As an entrepreneur, your chief focus is to protect your business as much as possible from probable perils. A liability insurance is a perfect fit here.
Factors that entrepreneurs must keep in mind:
For entrepreneurs, life insurance isn’t just about protection—it’s a key part of business continuity and personal financial planning. The right policy can cover liabilities, protect your family, and even support succession planning.
Action points:
- Match your cover to business loans and key person dependencies.
- Opt for term insurance for pure protection; avoid mixing it with investments unless cash flow allows.
- Review and update nominees and sum assured as your business scales.
Conclusion
As a business entrepreneur, your business is like your child. Moreover, your beloved family also depends on you and your income to fulfil their expenses and other financial targets. A family term insurance policy and a business protection plan are a must to run a successful business.
Be First to Comment