You have worked hard to provide for yourself, your family and your business legacy. Make sure you have the right types and the right amounts of insurance
Operating most farms is highly capital intensive. If you are like many farmers, you are asset rich and cash poor. You pour all of your hard earned money back into the farm. You know how much blood, sweat and tears it takes every day to ensure your bottom line. That’s why you want to take all appropriate measures to manage your risks and be able to meet unexpected challenges without jeopardizing yourself, your family, or the survival of your farm.
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Life insurance
The death of a business partner, key employee or family member can put any farm into a perilous situation. You cannot prevent the death, but you can manage the risk and help minimize the impact. For only pennies on the dollar, life insurance can help you defray expenses such as the cost of finding a replacement, buying back the shares or interest of the deceased partner, paying debts and income taxes owed by the deceased, or just making sure your spouse and children can maintain their lifestyle.
In terms of succession planning, life insurance can also be an advantageous strategy to take care of your non-farming children by leaving them the tax-free policy benefits.
Disability insurance
During your working life, you and your workers have a one-in-two chance of being sick or injured for a period of 90 days or more. Disability insurance is an essential component of financial planning for protecting yourself, your business partner and key employees. Disability insurance also protects your overhead expenses and business loans and lines of credit and funds your buy-sell agreement.
Critical illness insurance
Thanks to advancements in medicine, more and more people now survive cancer, stroke, heart attack and other critical illnesses. Chances are good that you will survive too, but will your finances and your business?
Critical illness insurance covers you for expenses incurred for a covered illness, providing you with financial stability allowing you to focus on your health and recovery. You are free to use benefits in any way you wish.
For example, benefits can help you avoid depleting your retirement or business funds. They can compensate your business for the loss of productivity or help hire a replacement. They could allow your spouse to take time off work to be with you. Your insurance also could provide access to new medical treatments or experimental drugs or pay for medication or health care not covered by provincial health plans.
