Personal Guarantee Insurance-Protect Their Investmentby Preeti Sen Marketer
When most people hear the words "personal guarantee insurance", they think of some sort of "insurance" plan for business owners who want to protect their investment from the unexpected. It can seem like a no-brainer that a personal guarantee will protect you, especially if you are a self-employed entrepreneur. Unfortunately, it is often a lot more complicated than that - and a lot less popular with businesses.
When you get into an agreement to have a person or business sign a personal guarantee for your business, it does not necessarily mean there is a problem with you. The idea behind it is that if there is a financial disaster, which you can prove is completely unrelated to your business, the insurer will pay you the claim in full. The problem is that when you are self-employed and do not have a corporate tax ID, or even a social security number, it is very hard to prove a legitimate need to file a claim with your insurer. This means that it is very easy to convince the insurer to pay you nothing.
Personal Guarantee Insurance-Variety of Benefits
If you are a business owner that does not carry an insurance policy, you should be aware of how difficult it can be to convince someone to sign personal guarantee insurance. While it might seem like an easy decision, there are a few things you should know about why it is usually the best decision to make.
The first reason why it is often better to pay out a claim and avoid signing a personal guarantee is that if you are self-employed, you can get yourself an individual health insurance plan or a group health insurance plan with a variety of benefits. You also have the option of selling your business to another owner. When you sign a personal guarantee that you can afford your current business expenses, you have all of those benefits taken from you.
Finally, personal guarantee insurance may also be a bad idea if the business owner does not have the money for it. If the business owner has an expensive lifestyle and is not making enough money to cover his own expenses, Contact us we sell life insurance policy which may have enough money to cover the cost of his personal guarantee.
Second, there are many disadvantages to signing personal guarantees. When you consider that the majority of the claims you file with an insurance company come with no claims costs, it becomes clear why the small percentage of claims that do have to be paid is so high.
If you do have personal guarantee insurance, it is a good idea to talk to your insurance agent before signing a personal guarantee. They can explain the problems that can arise if you choose to do so. They will know what the consequences are and what you can do to reduce them if you do.
So, is a personal guaranty a good decision? I'm glad you asked. The answer is yes, especially if you are self-employed and are not able to get your insurance through your employer. However, if you are a business owner, I would strongly recommend you check with the government to find out if this is something you might want to consider.
Another reason that personal guarantee insurance is not a good decision for most business owners is that it is often hard to prove that you will be able to cover all of your expenses in the case of an accident. Many of the claims that I have seen have been very expensive to cover because they have required all of your personal assets to be sold to pay for their medical bills and other bills that have been associated with them. This is something you do not want to do.
One final note about this: many businesses also offer this type of coverage as a part of their employee benefit plans. This is just something to keep employees protected. and it is not a replacement for the insurance plan they already have. Read more to know about Lower Rates Offered-California Low Cost Auto Insurance
These are the reasons that I think you should always have a personal assurance of your insurance policies. If you are self-employed and you do not have your personal guarantee insurance, I would strongly recommend that you consider signing one so you know you have covered your assets in case they are not covered by your existing insurance plan.
Created on Sep 10th 2020 06:33. Viewed 119 times.