Business Life Insurance
What is a buy-sell agreement funded with life insurance?
A buy-sell agreement is a legally binding contract that determines what happens to a business owner's share of the business when they die, become disabled, or retire. Life insurance funds the buy-sell agreement — when a business owner dies, the insurance proceeds are used to buy out the deceased owner's share from their heirs.
Key Points
- Buy-sell agreement: determines what happens to business owner's share at death/disability/retirement
- Life insurance funds the buy-sell agreement
- At death: insurance proceeds used to buy out deceased owner's share from heirs
- Ensures business continuity and fair compensation for heirs
- An independent agent can help you structure a buy-sell agreement