When its owner for more than four decades passed away suddenly, Troy Belting and Supply Co. in Watervliet, N.Y., could have collapsed, as do many family businesses that lose their leaders. Instead, the company continued to operate and grow, thanks in part to a succession plan funded by life insurance.
“We were able to keep operating the company and retain every one of our workers because my father had the foresight to put a succession plan in place that protected not only his family but also the livelihoods of all of our employees,” said Jason Smith, who succeeded his late father in 2003. “Whole life insurance was a critical part of that plan.”
And whole life insurance has become a part of the newest Troy Belting succession plan, too. “Both Jason and his mother, Karen, have purchased key-person whole life insurance policies and rely on the death benefits to ensure that the company and its employees will have continuity, should anything happen to either of them,” said financial professional Todd McDonald of The Albany Agency, a general agency of Massachusetts Mutual Life Insurance Co. (MassMutual). “They want to take care of their family and their employees in the same way that their father and husband did.”
The company’s story is a lesson in how whole life insurance can help business owners manage some of the most challenging and common risks they face, such as retaining control of a company upon the death of a partner, retaining and rewarding top talent, keeping a company running effectively upon the death of a key employee, and even finding cash at times when credit dries up.