Buy Sell Insurance Solutions
What Is A Buy-Sell Insurance Solution?
When a buy-sell agreement is funded with life insurance, the policy owner uses the insurance proceeds to purchase the business interest of the deceased owner’s interest at a predetermined amount. This type of buy sell agreement is called an Entity Purchase Agreement or Stock Redemption Agreement. With a buy–sell agreement that is funded by life insurance, the company or the individual co-owners buy life insurance policies on the lives of each co-owner. Thus, a principal died, the company or the co-owners would receive the death benefits from the insurance policies on the life of deceased principal.
What Is A Buy-Sell Agreement?
A buy–sell agreement is a legally binding agreement between the co-owners of a business. It is sometimes referred to as a buyout agreement. A buy-sell agreement governs the situation if a co-owner dies, is forced to leave the business, or simply chooses to leave the business. It serves as a kind of prenuptial agreement between the business partners and/or shareholders of a company—sometimes called a “business will.”
Benefits of A Buy-Sell Agreement
- A buy-sell agreement protects all partners in a business, whether they decide to leave the business or can no longer partake in the business.
- With a buy-sell agreement funded by life insurance, all costs involved are covered, in exchange for a small premium.
- If sufficient cash values are available within the policies, the funds can be accessed to purchase your interest in the business.
Why Crestway Group
The Crestway Group (CWG) can help you take care of your business and your family. A buy-sell agreement funded with life insurance will give you the confidence that your business and your family will be taken care of in your absence. Plus, the cost is small compared to the benefits. Contact a team member in our Business Lines Division to ask about assisting you in obtaining a coverage and our experienced life insurance agents can walk you step-by-step through the process of setting up a buy-sell agreement for your business.