Business Insurance Advice: Advice, Tips & Answers

Protecting Yourself & Your Family

Take care of the ones you love

Owning a business means greater rewards as well as greater risks. However, with some careful planning and the right protection in place, you can ensure that you and your family are covered financially.

Below are some important ways insurance can help:

Protect you and your family's interests in the business.

If you have co-owners or partners— you may need what is known as a buy sell agreement. This agreement should specify what will happen to your interests or those of another co-owner or partner upon retirement, death or in case of permanent disability.

You also may need a secure way to fund the actual buy-out. Rather than using personal funds or business assets, you can use buy sell life, disability and critical illness insurance. This type of solution protects you and your family in two ways:

• If a fellow owner, partner or shareholder passes away—or becomes permanently disabled and cannot continue working, or suffers a critical illness — you can use the insurance proceeds to purchase that person's business shares.
• If you pass away or become permanently disabled and cannot continue working, your fellow owners, partners or shareholders can use the insurance proceeds to purchase your business interests—ensuring that your family receives payment for your shares.

Protect yourself medically and financially anytime you travel.

If you had to be hospitalized while on a business trip in the U.S., would you be able to afford the expenses not covered by your government health insurance plan (GHIP)?

Many people assume they will be protected by their GHIP, credit card, or group benefits when a medical emergency occurs. But there may be gaps in these coverages. For example, when you travel outside of Canada, you may leave some of your government health insurance plan behind.⁽¹⁾

The next time a business trip takes you to the U.S., overseas or even to another province, consider travel insurance, which can provide:

• Unlimited coverage against a broad range of emergency medical expenses
• Protection against risks such as lost, damaged or delayed baggage and more
• Upfront payment for eligible medical expenses, coverage for emergency travel back home, and real-time assistance 24 hours a day, seven days a week

Enhance your retirement and transfer wealth to the next generation.

As a small business owner, retirement and estate planning are probably two of your top concerns. One way you can effectively plan for retirement and protect your estate is to use life insurance. Here are just two examples:

• Tax-exempt⁽²⁾ universal life insurance can allow you to accumulate funds without being taxed on its earnings and generate tax-free⁽³⁾ retirement income.
• Tax-exempt⁽²⁾ life insurance can also help offset the taxes, liabilities, and other costs your heirs will have to cover when you pass away.

For more on using life insurance to enhance your retirement or protect your estate, see our Personal Life Insurance Advice section.

Want to know more?

Visit our Business Insurance site to explore your options and the benefits of choosing RBC Insurance.

1) Travel Insurance: Ensure you have the protection you need before you leave, RBC Insurance, 2005.

2) Current tax laws limit the maximum amount of funds that can be invested in a tax-sheltered insurance policy.

3) Note that probate fees are applicable if you have not designated a beneficiary and the proceeds of your policy become part of your estate.