Business continuation plans often include a “buy-sell “ agreement. Funded by life insurance and written while the owners are alive, a buy-sell agreement ensures that your heirs can sell their share of the business to surviving owners—and that the surviving owners can buy those shares. Each owner also agrees not to sell his or her interest without first offering it to the remaining owners at an agreed-upon price or formula.
Make sure your dream and your business live on by considering the options a business-life insurance policy can offer.
Partnership Life Insurance
Many businesses are created as a partnership. But what happens if one of the partners becomes unable to fulfill his or her obligation due to a long-term injury or illness? Even worse, what if one of the partners dies? Partnership life insurance is designed to help your business survive the loss of a partner.
Partnership life insurance clarifies what happens if one or both partners dies. It covers transferring ownership, selling to a beneficiary and other options. In many cases, partnership life insurance includes a buy-sell agreement. This fixes both the price and terms of the sale in the event a surviving partner buys out a deceased partner’s interest.
Farmers Partnership Life Insurance can provide the necessary funds no matter when a partner’s death occurs.
Make sure that your business partnership is secure in the event of loss.
Sole Proprietorship Life Insurance
What if something happens to you and your business still has a lot of debt? Make sure your estate is protected with sole proprietorship life insurance.
What happens to your business if you die? What happens to any debt your business has accrued? When you’re a sole proprietor, the law makes no distinction between your personal assets and debts and your business assets and debts. Should something happen to you, all of your business debt is transferred to your estate and its heirs.
Sole proprietorship life insurance can provide funds to pay estate taxes and help sustain the business during the initial period of new management or its transfer to your heirs. Or, if your employees are interested in carrying on your business, a buy-sell agreement funded by life insurance will assure that your family receives the optimum value for the business.
Stockholder Life Insurance
Stockholder life insurance can be used to create a pre-death buy-sell agreement. It would arrange the sale of stocks to remaining shareholders should something happen to one or more of the business owners.