This option is not always a good source as most business owners reinvest their money back into their businesses anyway and therefore do not maintain large sums of available liquid assets on hand.

Also known as self insuring this approach is equivalent to doing no planning at all. If a key employee or business owner dies or becomes disabled, in most cases, cash flows will decrease and create a significant financial strain on any company. Therefore, the cash flow may not available to cover the ordinary operations costs much less the cost to recruit, hire and train a capable replacement.

The business may be able to borrow the funds from a lender. The business then pays back the lender over time thereby reducing the immediate financial impact of the loss. However, as in the case above, the death or disability of any key person will likely hurt cash flows and may also affect the borrowing ability of the company. Furthermore, the additional interest expense may be excessive and burdensome over time.

A sinking fund allows a company to accumulate the dollars needed over time. However, there are serious consequences if a key executive or business owner dies prematurely or sustains a disabling injury. In this case, the sinking fund would likely be insufficient to cover the expenses of replacing the key person.