Buy/Sell Insurance
Life insurance taken out on the partners of a business so that if one partner dies, the death benefit paid to the remaining partner(s) will fund the purchase of the deceased partner's share in the business. Buy-Sell insurance is generally accompanied by a buy/sell agreement that allows the surviving partner(s) to purchase the remainder of the business in the event of a partner's death.
Important facts and information to consider when purchasing Buy-Sell Insurance
Here are 5 Buy-Sell Insurance Planning tips for your company's or partnership's
Business Succession success.
What are the most important components of your Buy-Sell Continuation Planning strategy?
Did you know that a little over 45% of all business owners on average have most of their net worth tied up in their business?
Did you know that only 28% of all business owners have some type of Buy/Sell Insurance policy in place?
Here are alarming statistics about Buy/Sell Agreement Planning.
Less than 30% of all family business that is passed down to the second generation will survive. Unfortunately the ratio drops even further more to the third generation where only 12% of all family businesses passed down make it.
The question is why is this, and what can be done to stop it. Those are eye popping numbers.
We are confident you can pass on more of your legacy and your family business to your partners and heirs with excellent strategic Buy/Sell Insurance Coverage.
Here are 5 tips to consider when executing your Buy/Sell Agreement
1. Write and execute a buy-sell agreement.
2. Define the short and long term business goals from the ownership.
3. Value the business. Use a certified appraiser or business evaluation specialist.
4. Consider which partners need to have Key Person or Key Man Insurance and fund the policies.
5. Purchase Life Insurance Policies that have a disability benefit as well as a death benefit for all critical partners and owners and fund these policies as executive benefits paid by the company.
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