If you are in business there are only five ways out.

You sell your business, you retire, you die, you go bankrupt or your become disabled. Are you prepared?

Entrepreneurs are optimists in general. They believe they can achieve their dreams and move ahead into ventures where many people who fancy themselves to be realists would not dare to attempt. The problem with this optimism is when we discuss disability. They tend to realize they are doing what many would not, so they believe they can do what others cannot. Many of them under value their contribution to their business. So here are a few questions to answer honestly for yourself:

Could your business operate profitably without you if you were sick or injured for six months?

If you said yes, and you believe that is true, then why don’t you take six months vacation each year? Honestly, if you are not needed why do you show up each day?

Could your spouse take over your responsibilities while you are sick?

Really? Can your spouse do what they do now, and in addition to that take care of you plus run your business for you?

Do you believe you will be able to run your business from a wheelchair or bed?

Have you given proper value to your sharp decision making ability? What if your disability or your medication or treatment lessen your alertness or altar your thinking? What if you feel ill and aren’t up to decision making? What happens to the business? What happens to your employees? Your family?

There are several solutions and many variations of these which can be adapted to suit your particular situation. Consider a buy sell agreement in the event of illness. Many people get it all set up in the event of death, but fewer business have a proper buy sell that deals with disability. Another option is disability insurance for your personal income protection, so your business doesn’t get drained paying you when you are not helping out at work. Another form of disability insurance for business owners is business overhead insurance. Business overhead Insurance will pay your routine business expenses such as phone, hydro, office expenses and in some cases even office staff usually up to one year or at the most two years while you recuperate or arrange a sale of the business.

If there are partners or several executives there is an income replacement agreement which can reduce after tax expenses that can range into thousands of dollars annually when compared to individual disability insurance policies. The Tax Planning and Financial Planning pay off. Make sure you have a life insurance and disability insurance specialist as part of your adviser team. Accountants and lawyers are necessary but they are not the whole team.

By Gordon Hughes CFP who can be reached at www.SmartChoiceLife.com or call 1-800-471-0411