As a business owner with other partners, you should consider what you would like to have happen in the event of the untimely death of one of your partners.
We often consider life insurance on a personal level as a way to take care of unpaid debt or to help ensure the financial welfare of family. Similarly, in a business sense, you can buy life insurance policies for your key personnel, supplemented by a “buy-sell” agreement.
Your company can purchase life insurance policies on the owners in an amount that reflects their share of the assets of the business. This allows your firm to continue operations if one of these key persons perishes and provides funds for those entitled to those shares.
Think of the buy-sell agreement as a will for the business which is funded by life insurance. This agreement will spell out how the shares of ownership will be dispersed and how those funds will be allocated so that the business can
continue operating.
Your insurance agent or broker can collaborate with you and your legal team to craft a key-person insurance suite that helps ensure the perpetuation of your company.
