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Every business needs an insurance plan

Every business needs an insurance plan. Let’s make sure yours is up to date.

Chances are your business insurance needs have changed over the past year or so, just as your company has. Here is some of the items to review:

Medical Coverage*
Continuously rising costs have made health care the wild card of your company's planning strategy. Three points to consider:

  1. Health care is a key factor in an employee's decision to come on board and stay.
  2. Costs being what they are, unless you are a big corporation able to self-insure, you probably cannot afford to go without.
  3. Health care is an area undergoing rapid, innovative change. There are ways to control costs.

Questions to ask
Is our coverage meeting our needs, or is it leaving us and our employees dangerously exposed? Are our deductibles as high as we can comfortably afford? Are we aware of all the options available to us as a company, especially the recent developments designed to maintain quality health care services while controlling costs?

Key Executive Life Insurance
Your key people are your greatest assets. Life insurance can reimburse the company for loss of services if a key person dies. If you don't have key person coverage on your most valuable people (that includes you), you ought to at least explore its advantages. If you already have this valuable insurance, it may be time to review it.

Questions to ask
Are all key players covered, including the owner(s)? Are the amounts right in proportion to the value of each key person? Should names be changed on policies where a key person has left? What’s the cash value on each policy?

Disability Insurance*
If you, a partner, or a key employee become disabled, the loss to the company could be just as great as if he or she died. In fact, it could be worse, because that person would still require an income.

Questions to ask
Do I have adequate disability insurance on myself? Do we have coverage on our key employees to help meet our responsibilities to them if they become disabled?

Business protection, property, and liability coverage
A fire, vandal, or storm can wipe out your business in minutes. A bigger risk is being sued. According to the Court Statistics Project, nearly 20 million civil lawsuits were filed in 2009, a 28 percent increase from 2000. Make sure your assets are protected.

Questions to ask
Do I have business continuation coverage? If so, is it adequate? If my facilities were destroyed, would my business be able to recover? Is my liability-related coverage up to date? Is my umbrella insurance coverage adequate?

Business succession or buy-sell plan and the insurance coverage to fund it
If you don't have such a plan, perhaps this is the year to implement one. Such a plan helps ensure that your family is appropriately compensated for the business if anything happens to you.

Questions to ask
If we have a plan already in place, is it current? Is adequate life insurance in place to fund the buy- out? Does it include disability insurance needed to help replace my salary or income if I become ill or injured?

Deferred Compensation
Deferred compensation allows you to pay a portion of an employee’s compensation at a future date. It is an attractive incentive for select employees as well. By deferring a current raise today, for instance, you can potentially get a tax break for yourself. Plus, you will be providing for your own future. As always, check with a tax professional about the tax implications.

Questions to ask
Am I fully aware of all the advantages and benefits of a deferred comp plan? If there is a plan in force, am I taking maximum advantage of it?

Qualified Retirement Plan
Many small businesses shy away from the idea of a pension plan, but there are a number of options, including Profit Sharing Plans, Simplified Employee Pensions and the SIMPLE Plans.

Questions to ask
Is our retirement plan up-to-date? Does it reflect our company's unique needs and situation? Am I aware of all our options, especially in light of legislation that makes it easier for business owners to install a workable qualified plan?

A New York Life agent would be happy to review your life insurance needs during a no-cost no-obligation meeting. To find an agent near you, click on the 'Talk to Us' button.

* Products available through one or more carriers not affiliated with New York Life Insurance Company; dependent on carrier authorization and product availability in your state or locality.

** Property and liability is not offered through New York Life.

This material is for informational purposes only. Neither New York Life nor its agents provide tax, legal or accounting advice. Please consult your own tax, legal or accounting professional before making any decisions.

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