Financial protection for the self-employed

If you are self-employed, you are fully aware of the joys — and the pressures — that being your own boss bring. You can work as much or as little as you choose. And as long as you are healthy, your ability to generate income is secure and your family can enjoy the life you’ve created for them. However, have you given any thought to what might happen to that lifestyle if you were to die?

The stakes are high . . .

If you were no longer around to provide for your family, could they afford to continue living in the family home? Could they pay everyday living expenses such as food, utility costs, and medical expenses without your income coming in? If your death would place a serious strain on your family’s finances, you should consider taking steps to protect their future financial security. Life insurance is one of the most effective ways to ensure your family won’t suffer financially should the unexpected happen to you.

. . . especially for sole proprietors

Sole proprietors are personally liable for all of the debts of their business. Death does not make that liability disappear. All financial obligations or any losses at your death become the responsibility of your estate. Business debts include:

• Mortgage or lease payments on your business facility


• Outstanding payments owed to vendors, suppliers, employees and other parties


• Loans your business obtained from banks or governmental lenders


• Sales taxes and local, state, and federal income taxes

Depending on the extent of your business debts, your estate may have to sell off or transfer personal assets to satisfy these debts. Adequate life insurance coverage can prevent this scenario from coming to pass. Your estate can use the proceeds from your life insurance policy to settle any of your business’s outstanding obligations.

FINRA Reference FR2017-0427-0092/E 08/02/17