In the world of startups, where uncertainty and risk are constant companions, you must make strategic financial planning as an entrepreneur to create the difference between success and failure. A term insurance plan is one of the best options to help you create this difference. Apart from its primary function of providing financial protection in the event of death, you can utilise term insurance to achieve tax savings and grow your start-up in multiple ways. This article will explore how term insurance can help in startup success.
Here are a few reasons why you must purchase term insurance for your startup success:
Table of Contents
Whereas a salaried individual works on a 9-to-5 basis, earnings from your business could vary greatly. It could be very challenging, especially if you have just started the operation and the returns are not enough after putting in full effort. When you are self-employed, the income generated out of it depends on the quantum of power you put into it.
In such scenarios, your death can cause a financial problem for your business and family. Therefore, you can buy a term insurance plan to secure your loved ones and protect the business.
When you have a startup, its growth will always require funds for expanding the business or working capital. Although financial institutions or banks can provide funds for the business, it will only mean more liabilities for you.
In case of your absence, business liabilities will slow down your business and affect your family’s finances. Hence, you can lower such risks by investing in a term insurance plan to protect the family’s finances.
You can grow your startup through the loyalty and satisfaction of your employees. However, the loss of your key employees can result in huge emotional and financial losses. A term insurance plan ensures financial loss for your employees, as they will be getting their regular salary.
It lessens their burdens and ensures they are protected financially in case of a mishap. Moreover, it does not comprise a supporting environment but also hampers the skilled team members who will run the business continuously in your absence.
Another reason term insurance is crucial for entrepreneurs is due to the term insurance tax benefits under Section 80C and Section 80D of the Income Tax Act of 1961. It enables you to get tax benefits of Rs. 1,50,000 per annum for the premiums.
In addition, it makes you eligible for tax benefits of Rs. 25,000 for the premiums you pay for term insurance riders, including critical illness.
Consider the following factors when selecting a term insurance plan for your startup needs:
Henceforth, operating a startup is an exciting journey because you work tirelessly to introduce your product or service to the world. However, while preparing for the future growth of your startup, you should not overlook unforeseen emergencies and plan accordingly. Hence, buying term insurance is the best-known risk mitigation tool to ensure that your dependents and business are not affected in your absence.
Maintaining commercial gardens can be tricky. With large spaces to manage and the climate to…
Each company should offer its customers the best services and experiences, which is especially vital…
13 December 2022 Focusing on specialized areas within SAP applications has become increasingly important. By…
Cross-border trade has become a critical way for many businesses to expand their operations amid…
Intel, the world's leading manufacturer of microprocessors, has dominated the semiconductor market for decades. However,…
8 July 2024 In the ever-evolving insurance industry, data forms the foundation for innovation, efficiency,…