Business On Moon

Farm insurance agents understand better than all the rest of your farm or business advisors put together that cash money delivered at the death of a key person is often the only thing that keeps your enterprise alive.They know that key person life insurance proceeds are likely to be the only money coming in at a time when so much money is going out.

The definition of key person life insurance varies, but in a nut shell it is life insurance designated to replace the loss of an individual whose value is important to the business.Typically this is meant to be someone other than the business owner, such as one or more employees whose role is important.These are the people you'd say, "I don't know how we'd get along without..." and whom you will have to replace if they leave.

Who are your key people?Why don't you make a list of your production team leaders, managers, supervisors, and other key people?Then ask yourself what would it mean to you if one or more of them, the valuable ones, left - died, quit, became disabled, etc.What would you do, would their loss effect profitability?

How exactly would you replace them if you had to do so all of a sudden?If they really are key people they must be replaced - because their important jobs must still get done by someone.Everybody else is already working flat out doing their own jobs.

How long will it take to find their replacement?How much will you have to pay the new person?Will it be more or less than you are paying your existing key person?How long will it take to train them and how much will training then cost?Who will train them and who will do their job while the training takes place?

The risks associated with having a key person stuck down with a long term illness or death, are real indeed.Farm insurance agents have charts and formulas that can put actual numbers together based on the loss your business will face in the event one or more of your key people leaves.

What are the odds, given the ages of your key people - that one or more of them will leave before you want them to?Farm insurance agents also have actuarial tables that will tell you the odds?When you understand the odds you can make the decision - can we afford to take the risk or should we insure some or all of it?

When you take the risk you are quite literally betting the farm on a roll of the dice.When you off-load the risk, paying a small fee to the farm insurance company, the farm is safe.If anybody loses it will be the insurance company.

Farm insurance agents can help you determine how much cash you will need to have instantly available, how much money the farm life insurance company will need to deliver, money neither you or the farm have to pay back.

In my opinion the best way to make sure you are protecting your farm business, your family and yourself is to work with an experienced farm insurance agent whose opinions you trust.

If you don't know a farm insurance agent like that, ask a farmer or business owner like yourself, someone you trust and whose opinions have been solid help for you in the past.

Ask them for the name of farm insurance agents they have used that they are the happiest with.Then call the farm insurance agent and set up a time to get together!

And when you meet with them, honestly describe your situation and ask for their advice.

Successful farmers understand that concentrating on the immediate short term decisions that add to their profits , and that require countless hours of their time, should not take all of their energy, They understand that the valuable insights of their farm insurance agents can help them focus on what is important to them, their family, and the farm - for years to come.

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# posted by David @ 4:41 PM