Premature Death or Disability

Death or Disability Definition: Whether from illness or accident, premature death occurs earlier than is calculated on an actuarial table. Disability means loosing the physical or mental facilities required to function in daily life and often requires professional, full-time, long-term care.

How can Katz Financial help prevent a premature death or disability from destroying your business?

Worst Case Scenario

Are you and your family prepared? If you die suddenly or are struck down by disability, your family might not be equipped to take over or even sell your business. You may have taken out loans backed by your family’s assets to start or grow the business. If forced to sell quickly, your heirs may have to do so at a discount or during market conditions that makes it less attractive.

If you have partners, your family might be unable to step into your role or your partners might not be able to quickly buy out your share.

Income Replacement

Conscientious business owners need income replacement insurance for their families, key person coverage and buy-sell agreements to protect the future of their companies.

If a partner, owner or key employee is suddenly gone, the business can deteriorate very quickly. With the right insurance in place- the surviving business partners will have enough capital to keep the business going while looking for a replacement for the deceased partner or to buy out the heirs of the deceased partner.

 

 

Death or Disability

The death or disability of an owner or key employee can devastate a company by creating a vacuum of leadership, which can cause an irreversible downhill slide in company performance.  What often happens when there is no funded succession and continuation plan that covers against death or disability are:

  • Debts that are signed by the business owner as the responsible party can get called to be paid in full, because the signor is no longer around to guarantee and collateralize the debt loan
  • Employees lose confidence in the future of the company and start looking for new jobs or just leave the company.
  • Morale of employees that stay on become negative and morale is destroyed.
  • When employees are nervous about their companies future they start worrying naturally about themselves.  Instead of being concerned about team spirit and company loyalty they think about self- preservation and begin looking for other jobs.
  • Disability can be worse than death because a dead person stops consuming resources, while a disabled person consumes resources and stops being productive.
  • Death causes brains, talent, leadership and production to be lost forever.