I wanted to share this story with you for several reasons. First of all, I am overjoyed that I still qualify from a health point of view for $1 million in life insurance. I don’t have any serious health issues, but I’m not getting any younger and with age comes the increased likelihood of health challenges, which is one of the reasons I wanted to get this life insurance policy implemented inside my corporation.
As of September 2018, I will be celebrating 20 years working in financial planning. One of the takeaways from these past two decades is the importance of life insurance and the role it plays in ensuring the future of not only your family, but also your business.
So, why did I want to put a million dollars of life insurance in place to protect my business?
Given my team and I have big plans and dreams for the future, life insurance will ensure that these dreams become a reality, with or without me. These dreams include launching a fun financial literacy course in partnership with renowned comedy writer and musician Trevor Strong, who I want to thank for his tireless injection of humour and fun into what is often rather dry material!
Additionally, I’m working on bridging the gap that currently exists between what Canadians want to be doing with their money in terms of philanthropy, and what is actually happening. Sadly, those needs are not currently being met by many Financial Advisors and I think it’s important to help shift that paradigm across our industry and our country.
My team and I are also addressing the financial planning needs of couples, through a tailored course which supports and encourages them to focus on their strengths while improving their relationship with each other, and their money. Ensuring these projects will be able to continue even if I’m not around is important to me, and I take pride and comfort in knowing they’ll receive the support they need to come to fruition.
I have an amazing team of professionals working alongside me. Stopping and asking myself what would happen if I died is an example of “practicing what I preach”. I, like most business owners, can get so caught up in my vision for the future, and seeing myself as part of that future, that I often don’t consider how things could potentially fall apart if I were to die prematurely or become critically ill. (I also have a substantial amount of critical illness insurance in place, you’ll be happy to know!)
Thinking about our own mortality is never easy. As business owners we are among the least likely to think about our own mortality, because we’re often too busy working on the businesses we’re so passionate about. Even addressing a succession plan is a challenge given all the sweat, tears, and time we’ve poured into our businesses and the relationships that accompany them. Imagining someone else taking over what we’ve worked so hard to build becomes incredibly difficult, and yet, it’s a much-needed exercise.
So, why a million dollars? How did I come up with that number? I thought about the amount needed to do the following: First, providing an initial payment to my spouse as part of the purchase agreement in transferring the ownership of my business to my successor. Secondly, ensuring that there would be sufficient funds to pay everyone and keep my business running through the transitional period, while also ensuring the money would be there to get the fun financial literacy course, and the couples course successfully launched and maintained. Finally, to provide the resources to meet our goal for 2018 of implementing 100 charitable giving life insurance policies, which will simultaneously raise 5 million dollars for charitable organizations that we’ve already partnered with (imagine the impact!).
When I quantified all that work, it added up to one million dollars of life insurance coverage, a policy that is now owned by my corporation. Because my corporation is also the beneficiary, the premiums can be paid by my business for approximately $450 per month. Pretty cheap, when you think about everything that money can accomplish!
Now my question for you is, have you thought about your succession plan? The impact for your business if you were to die prematurely and, most importantly, do you have the money to make your business dreams a reality, even if you’re not there?