In our last article we
discussed the concept of investing 10% of your net income per month into the
many areas of your Business Succession Plan.
I suggested to concentrate on your Buy-Sell Plan as that covers not only
the majority of your planning for your business (premature death, being
incapacitated or retirement), but also the most important areas. Lastly I said to consider Life Insurance as
the cornerstone of such a goal. Now comes
the debate, Term Life Insurance or Whole Life Insurance?
Let me first say that I
only focus on what my client’s objectives are and then offer a variety of methods
to achieve those goals. In other words,
I recommend both types to clients. Do I
prefer one over the other? Of course I
do. But my point is that I give both
plans to all clients and then let them decide which is the most comfortable to
them.
Often clients are understandably
too busy to take time to “dig in” and find the differences. Or worse yet, they have been misled by many
so-called self-appointed experts, when even they have their hidden agendas that
often don’t match the clients sincere and real objectives.
Tomorrow’s entry will dive into the areas to
help you better understand what plan is the most appropriate plan for you and your business. As a prelude try this exercise. Take a large sheet of paper (I tape together
two (2) 81/2×11 copy paper). Then at the
top make four (4) columns that read; 1. Objectives, 2. Assets/How they’re owned,
3. Questions I Need to Ask and finally
4. Possible Recommendations. This format can help you in formulating your
Business Succession Plan. Stay tuned for
tomorrow’s episode.