Are you a First-time Entrepreneur? Here's why you need Term Insurance!

It is really no rocket science to know why more aspiring and driven entrepreneurs are taking the plunge with their innovative business ideas and plans.

The reasons behind this are quite obvious-

The interest of the consumers has shifted drastically from well-established leaders of the market to the new-age start-ups.

However, here is the bleak and hard truth-

For each birth, there will be an irrefutable demise, and the eco-systems for start-ups is no different. Most of the first-time entrepreneurs usually invest their personal finances for building their business from scratch. A lot of them opt for business loans without actually realizing that the repayment of the loan has to be done in full even if they are not around. Unfortunately, self-employed people do not usually have group life covers for taking care of the financial security of their families after their demise.

This the situation where term insurance comes into the scene for rescuing the self-employed people. These plans offer comprehensive financial security for the future of the family or loved ones of the self-employed people who take the plunge for giving their business plans wings to take off.

Although establishing your business includes a sense of duty, responsibility, as well as ownership, it also happens to be riskier as opposed to a fixed and regular income monthly. Pretty much unlike the people earning a salary, the first-time entrepreneurs do not have a fixed income. And it doesn’t end here; a lot of first-time business owners also end up opting for business loans to give a financial push to their business.

But the problem is that making repayment of the business loans in the case of the unfortunate and untimely death of the self-employed professionals turns out to be a daunting task for the members of the family. And this is the reason why each first-time entrepreneur should make an investment in the most suitable term life insurance plans for securing the future of his or her family, even when he or she is not around anymore. 

In case you are not convinced yet, read the following points carefully, which will help you in understanding the reasons behind buying a term insurance policy before taking a leap in the business world.

Unsteady Earning

You will all surely agree with the fact that full-time employment comes with its own benefits. The timings are fixed, so is the earning. There is always a sense of financial safety. Some of the professionals get financial rewards on the basis of target, whereas other people get variable bonuses with their fixed incomes. Using this fixed salary, it is simple to plan your expenses and budget.

However, for new entrepreneurs, the income may dramatically fluctuate. Although people might invest a particular amount for generating some additional revenue, there isn’t a guaranteed income each month. This kind of fickle cashflow can simply deplete your savings.

With hefty bills and depleting savings, term insurance plans can ensure the financial safety of the family of the self-employed professionals when the latter is not around. 

Loans and Borrowings

Small businesses and start-ups are the main drivers for the economy of the country. Unfortunately, most of these businesses face the issue of lacking working capital. Now, setting up the business successfully is only half of the journey. Usually, new set-ups find it hard to expand their business in the market as it may need deployment of additional resources financially.

Seeking loans can instantly expose the owners of the start-ups to more financial risk. Moreover, repayment of these loans could be a challenge for the family members of the entrepreneurs in their absence. Hence, it only makes sense to invest in a sufficient term life insurance plan for making sure that their family is covered and the financial burden of making repayment of the hefty loans does not come on them. 

Losing Good Employees

Having a good team of employees could easily define the difference between the success & failure of a business. Generally, businesses particularly start-ups, might get into trouble or face losses because of the sudden death of their main employees. This is where your insurance comes to the rescue of the entrepreneurs.

In the case of the sudden death of the main employees, a company may overcome the financial losses using the amount of sum assured of the plan. With the help of some riders on term insurance, it can be ensured that the organization continues to be sustainable and recovers the losses when those main employees are not around. 

Unemployed Spouse

A term policy is useful for those first-time entrepreneurs who have a non-working or unemployed spouse. Term plans make sure that the onus of the loans and debt borrowed by the entrepreneur is not shifted to the grieving partner. Moreover, the insurance policy will take care of the repayments for reliving the financial burden of the non-earning spouse. 

The Bottom Line!

Now you must have understood what makes term insurance so necessary for first-time entrepreneurs. Always keep in mind that term policies are hassle-free, cost-effective, and make sure that your loved ones get the iron-clad financial security even when you aren’t around.