Is it Time for Business Owners to Take Off Their Invincibility Cloak?

entrepreneur's invincibility cloak

Something about the phrase, “Don’t worry about it,” automatically has the opposite impact on me. Whether it comes from one of my kids or someone trying to convince me of something I’m unconvinced about, that phrase always makes me suspicious. Here is a story where a business owner was told by his business partner, “don’t worry about it,” when asked if he had life insurance for the business. The following story was so easily avoided at a relatively small cost to the company, which meant the business would’ve been protected, and the business owner’s family would’ve been wholly looked after. As a result, the entire business was almost lost, and the business owner’s young family could’ve been completely displaced and quite conceivably lost everything if not for his partner’s generosity.

I ran into JK at a Starbucks a few months ago. He stopped and chatted with me as I was working away. He said I’d written something he read on LinkedIn a while back that resonated with him. (So, that’s the guy that reads my blog posts!) It was a piece that I had written about Buy-Sell Insurance, or Partnership Insurance as it’s commonly referred to. He touched on a story about his former business partner, who got sick and didn’t have the insurance he claimed he had. We exchanged contact information and agreed to schedule a call to discuss in a few weeks.

On our call, I learned some interesting details surrounding JK’s real business tragedy. I’m not saying that all male entrepreneurs have this invincibility complex, but I have met my fair share of them. Many brilliant and successful business people don’t like looking at their vulnerability or mortality. Looking back into my 20’s and 30’s as a business owner, I likely could’ve been categorized as someone similar. When I had my family and discovered I had cancer in my late 30s and early 40s, it made me revisit my infallibility.

JK explained how his partner owned a 34% stake in the business. He had no business, personal life insurance, critical illness or mortgage insurance, even though he was married with two young children. He wasn’t feeling great and went to the doctor, only to be diagnosed with stage four stomach cancer. He passed away four weeks later. He was forty-four years old.

I had another client we set up buy-sell life insurance for last year. At the same time, we set up a critical illness policy for her to be held personally. She called me in June to tell me she had colorectal cancer. She didn’t tick any of the boxes as a candidate for cancer. She was young, exercised regularly, ate healthily and saw her physician regularly. That’s the problem with cancer. It’s just so damn random. Fortunately, we had set up a critical illness policy for her, which will pay out a nice sum of money, so she doesn’t have to worry about finances as she recovers.

JK and the Board could’ve shut down the business and reopened it as a different entity, but they didn’t take the easy road. They showed compassion towards the former business owner’s family and are restructuring things to compensate them accordingly. They showed compassion when they didn’t need to. They looked after the needs of the family ahead of their own.

Sadly, this entire situation could have been averted with a life insurance policy for a few thousand dollars a year. As JK mentioned, this was much more complicated and expensive than needed. Fortunately for the former business owner’s family, the current Board elected to show compassion when they weren’t required to be so. Alternatively, the wife of the former business owner could’ve designated an outside person to run the business in her husband’s absence. Consequently, the Board is structuring a managed buyout of the former owner’s shares, and the owner’s estate will get paid out. This could’ve had a much more catastrophic ending for the business, and the family had the Board elected to take the easy way out.

I get that not everyone is a fan of life insurance. You can’t mitigate against all risks. That’s the nature of an entrepreneur; we manage risk as a chosen profession. There are reasonable risks and unnecessary risks. Some brilliant business people have taken stupid risks because they believe those catastrophic events only happen to others. The only person that wants to purchase life insurance is the individual that no longer qualifies. So, Entrepreneurs, it may be time to take off that invincibility cloak and leave it in your closet until Halloween.

Chris’ Bio

To say Chris is passionate about youth mental health is an understatement. Since he lost his 14-year-old daughter, Maddie, to suicide, he’s been trying to coach parents with similar struggles with their kids. He’s talked to hundreds of parents with struggling kids. In many cases, these parents are barely holding it together too. He knows because he was one of those parents. He is relentlessly ensuring another family doesn’t experience the loss his family has endured. 

He is Co-Executive Director of How Are You Feeling, an online, scientifically-based teaching program that makes kids understand their emotions and how to properly deal with them before they become “big feelings.”  

Chris has been an entrepreneur for most of his career. He also runs a financial services company called The Finish Line Group, where he helps support the entrepreneur’s financial, philanthropic, and emotional journey. 

Chris has written extensively about his experiences with his daughter and has been featured in numerous print and online publications and radio and television media. He has been a keynote speaker at several entrepreneurs and mental health conferences. 

His personal “Why Statement” is “To openly communicate the lessons learned from his past so that others will thrive in their lives, minimize their setbacks and leave a positive and lasting legacy.”