Cory Burnell

Charles de Gaulle once remarked, “The graveyards are full of indispensable men.”¹ While we know that life goes on regardless of the loss of any “indispensable” person, for a small business, the loss of a key person is not only a human tragedy, it can also represent the potential for significant financial loss. Though business owners cannot protect themselves from the unexpected and sudden loss of a key employee, they may be able to protect themselves from the financial consequences of such a loss through the purchase of what is called “key person insurance.” Who’s Key? There is no legal definition for who a key person is, but he or she is someone whose loss, due to death or disability, would cause a material financial setback to the business. For example, a key person may be a top salesperson whose production would take considerable time to replace. Or perhaps it’s someone who is guaranteeing the business access to needed future capital. Key person insurance is a standard insu

Ancient Chinese merchants are said to have developed a unique way to reduce their risk. They would divide their shipments among several different vessels. That way, if one ship were to sink or be attacked by pirates, the rest stood a good chance of getting through and the majority of the shipment could be saved. Your investment portfolio may benefit from that same logic. Diversification is an investment principle designed to manage risk. However, diversification does not guarantee against a loss. The key to diversification is to identify investments that may perform differently under various market conditions. On one level, a diversified portfolio should be diversified between asset classes, such as stocks, bonds, and cash alternatives. On another level, a diversified portfolio also should be diversified within asset classes, such as a diverse basket of stocks. A Diversified Approach For example, say a stock portfolio included a computer company, a software developer, and

Whole life insurance remains in force for your whole life, as long as you remain current with your premiums. In exchange for fixed premiums, the insurance company promises to pay a set benefit when the policyholder dies.   Whole life insurance policies build up cash value   — effectively a cash reserve that pays a modest rate of return. This growth is tax deferred. Guarantees are based on the claims-paying ability of the issuing company. Most whole life insurance policies will let   policyholders borrow a portion of their policy’s cash value   under fairly favorable terms. And interest payments on policy loans go directly back into the policy’s cash value.* When the policyholder dies , his or her beneficiaries receive the benefit from the policy. Depending on how the policy is structured, benefits may or may not be taxable. *Whether whole life insurance is the best choice for you will depend on a variety of factors, including your unique goals, needs, and circumstances.