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By African Unity Life

Wed, 21 Oct 2020
African Unity Life

Life can be unpredictable both in your personal and business. 

In most cases, those unpredictable circumstances require money. Having money for unexpected emergencies is beneficial for a company, not just for your employees. Group life benefits isn’t only something you need to look into for your employees. While it has employee benefits, such as helping you retain valuable workers who are looking for more than just their salary from a company, there are some undeniable benefits for your business too. 

As a life insurance company, we can offer your business just as much as we can offer your employees. If you’re looking for additional financial security for your business, read our article below on the five uses of a life insurance policy for your company. 

Helpful when seeking financing 

Whether you’re planning on expanding your business, or you wish to purchase expensive equipment, there will come a time when your business needs a finance buffer. Depending on the loan amount you’re interested in, lenders will need some form of security, if something unexpected happens and your company is unable to afford the repayments. That is one of the benefits of life insurance cover for your business, as it can be used as collateral. It gives lenders the security they need to approve your company’s financing, especially if you’re a small business without many assets. 

Avoid liquidation in the future 

Over the years, we have seen businesses fail due to low cash flow. This can be a result of an owner’s passing or unforeseen global challenges. There are also cases where families need financial support from the organisation’s cash flow, which can be detrimental if they cannot afford to pay it back. Although having a funeral policy cover is beneficial for owners, having a lump sum in the form of a group life insurance scheme can be beneficial too. In the event of a family passing, getting a tailored group life insurance in South Africa like ours can help your family come up with enough capital to cover beyond your funeral plan such as debt or children’s tuition. This ensures that no assets are sold to take care of your family when you’re not around. This will allow the legacy of your business to continue. 

Protection for key business executives

A group life scheme can be beneficial at giving key executives or management representatives more protection. A funeral cover may assist with the burial of an executive, but their families may need additional help with finances. A group life cover ensures that all key executives' families are financially secured in the event where a family member, who was financially taking care of them is no longer around. This can also be an effective way of retaining top talent within the industry.

Helpful in succession planning  

Another advantage of life insurance is that it is vital for any succession plan. Should a co-owner of the business pass away, the life insurance policy can be used to purchase the deceased partner’s shares. This ensures the business continues to run smoothly as there won’t be a need to take from the organisation’s working capital or cash flow. 

Ensures business survival 

In a partnership or cooperation, the survival of a business usually depends on an individual. Whether that is because of their expertise or performance, and when they are no longer there, it can be a difficult time for the business. To have time to adjust to the new situation, you need financial protection like a life insurance plan. Your policy with us will ensure that your business can stay afloat without the key members and their expertise or performance that brings in money. This will give your company a financial cushion until you come up with a feasible plan.

Final thoughts 

Often times, businesses will look for group schemes for their employees, but never consider the same for their business. But, a group scheme has as many benefits as it would for your workers. And, keeping your business financially stable not only works in your favour but also ensures that your employees will be able to support themselves and their families. So, take a look at a life insurance calculator to see what premium is suitable for your business. We are always eager to help, so contact African Unity Life Ltd, a licensed life insurer and an authorised Financial Services Provider FSP NO. 8447, and we will ensure you get the best-tailored premium for your business.