Life Insurance Is a Business Strategy and Not Just a Personal One
- Brainz Magazine
- 7 hours ago
- 5 min read
Marco Benavides is a Retired and Disabled Military Veteran, Entrepreneur, Visionary and Philanthropist. He is a Minority Business Owner, Published Author and Motivational Public Speaker. He is the CEO and Founder of Holy Spirit Ministry Foundation, and in 2024, he was acknowledged as an Honored Listee in the Marquis Who's Who Publication.
Ask most business owners what’s keeping them up at night, and you’ll hear answers like cash flow, employee retention, or scaling challenges. But here’s one critical piece that often gets overlooked: life insurance.
It may not sound exciting, but as an entrepreneur and business leader, I’ve learned firsthand that life insurance is more than just a financial safety net; it’s a smart business move. Whether you’re a solopreneur or managing a team of 200, having the right life insurance policy in place can protect your family, your company, and your legacy.
Let’s unpack why this matters and what options you should be considering.
Why entrepreneurs can’t afford to ignore life insurance
1. Your business doesn’t run without you
If you’re a founder or key person in your business, your death would be more than a personal tragedy; it could throw your entire company into financial and operational chaos. Life insurance can:
Cover outstanding business debts or loans tied to you personally
Provide a financial cushion to keep the company running during a leadership transition
Fund a buy-sell agreement with your partners
2. You likely don’t have traditional benefits
Many of us left the 9–5 grind to build something of our own, which also means no employer-sponsored life insurance. If you’re not building this safety net yourself, no one else will.
3. You want to protect your family, without relying on the business
Your business is an asset, but it’s not always a liquid one. If something happens to you, will your family have immediate access to funds? Life insurance gives them financial breathing room, so they’re not forced to sell or mismanage the company under stress.
Smart life insurance options for business owners
1. Term life insurance, simple & affordable
Best for: Young entrepreneurs or those on a budget
Pros: High coverage for low cost; ideal for covering a mortgage, education, or a 10–30-year business loan
Cons: Expires after the term, no cash value
This is often a starting point. Think of it as a bridge until your assets or business income can provide more self-insurance.
Term life insurance is widely available in the UK and functions similarly to its counterparts in other countries. It provides coverage for a specified period (e.g., 10, 20, or 30 years) and pays out a lump sum if the insured person dies during the term. This type of insurance is commonly used to cover financial obligations like mortgages or to provide financial support to dependents.
2. Whole life or permanent life insurance, stability + cash value
Best for: Owners looking to build long-term wealth and asset protection
Pros: Lifetime coverage, guaranteed payout, and builds cash value you can borrow against tax-free
Cons: More expensive than term insurance
Bonus: The cash value can be accessed in retirement, or used to fund future investments — a tool not just for protection, but strategic financial planning.
*In the UK, whole life insurance is often referred to as life assurance. This policy guarantees a payout upon death, regardless of when it occurs, provided premiums are maintained. Some policies may also accumulate a cash value over time.
3. Key person insurance safeguards your operations
Best for: Any business reliant on one or two critical team members
How it works: The business owns the policy and is the beneficiary; if a key employee dies, the payout helps stabilize operations, cover losses, or recruit top-tier replacement talent
This protects not just your family, but your employees, clients, and shareholders too.
Key person insurance (formerly known as "key man insurance") is a common business protection policy in the UK. It covers the life of an essential employee or director whose loss would significantly impact the business. The policy is owned by the company, and any payout is made directly to the business to help mitigate financial losses, cover recruitment costs, or manage operational disruptions.
4. Buy-sell agreements funded by life insurance
If you co-own your business, a funded buy-sell agreement ensures that your share of the business is fairly bought out and transferred to surviving partners, without drama or lawsuits.
Protects the business from ownership disruption
Guarantees your family gets fair value for your share
Keeps control in the hands of trusted partners
*While the term "buy-sell agreement" is more prevalent in the US, the UK has equivalent arrangements known as shareholder protection or partnership protection. These agreements are often funded by life insurance policies to ensure that, in the event of a business owner's death, the remaining partners or shareholders can purchase the deceased's share, ensuring business continuity.
Relevant life insurance
Additionally, the UK offers Relevant Life Insurance, a tax-efficient policy for employers to provide death-in-service benefits to employees, including directors. This policy is written in trust, ensuring that payouts are typically free from income tax, National Insurance, and inheritance tax.
Summary:
Insurance Type | UK Availability | Notes |
Term Life Insurance | ✅ Yes | Standard coverage for a fixed term. |
Whole Life Insurance | ✅ Yes | Known as "life assurance," it provides lifetime coverage. |
Key Person Insurance | ✅ Yes | Protects businesses against the loss of essential personnel. |
Buy-Sell Agreements | ✅ Yes | Referred to as shareholder or partnership protection in the UK. |
Relevant Life Insurance | ✅ Yes | Tax-efficient death-in-service benefit for employees and directors. |
If you're considering life insurance options in the UK, it's advisable to consult with a financial adviser or insurance specialist to determine the best fit for your personal or business needs.
Don’t wait for the wake-up call
I’ve seen colleagues wait too long. They meant to “get around to it” after closing that next round of funding, expanding to a new market, or finishing that big rebrand. Then the unexpected happened, and their families and businesses paid the price.
Getting insured isn’t about expecting the worst. It’s about protecting what you’ve built and creating a plan for every scenario. You can compare quotes online to find the perfect life insurance solution for your needs. Don’t wait, life is unpredictable.
A final thought
If you’ve spent years building a business, protecting your family, and investing in your team, then having the right life insurance policy isn’t optional. It’s part of being a responsible, visionary leader.
After all, strategy isn’t just about seizing opportunity. It’s about managing risk.
Read more from Marco A. Benavides
Marco A. Benavides, Visionary and Philanthropist
Embarking on a transformative journey to the United States at just six years old, Marco A. Benavides, a proud individual of Mexican descent, now radiates wisdom and compassion at 51 years young. With a loving family of four extraordinary teenagers by his side, he distinguishes himself as a Spiritual guide, channeling the wisdom of the Holy Spirit to offer profound counsel. A beacon of hope in today's world, he champions mental health awareness and empowers others to forge a meaningful connection with the divine, inspiring them to lead lives filled with purpose and productivity.
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