Disability Buy Out Insurance
If you or one of your partners is disabled…
- Would you want to sell your share of the business?
- Would you want to buy out your partner?
- How would the price be determined?
- Where would the money come from?
- Is it guaranteed to be there when it’s needed?
In the event of a disability, there are many issues to be resolved.
The disabled partner may:
- Become a drain on income while not contributing to the business
- Have different priorities for the business income and profits and may not want to reinvest profits
- Decide to let spouse or relative take over their role in the business
The healthy partner:
- May not be able to pay the disabled partner an income and maintain the business
- May not have funds to buy out the disabled partner
- May not want to share business decisions with the disabled partners family
A properly funded buy-sell agreement between owners will address these issues.
The advantages of a disability buyout agreement:
The disabled owner:
- Assures a definite price and buyer
- Financial future is no longer contingent on business success
The healthy owner:
- Avoids negotiation of price
- Assures complete and orderly transfer of ownership
- Retains control of the business
- Provides continuity and credibility for customers and creditors
Our disability insurance specialists can provide you with:
- An assessment of your current program
- Design options
- Cost/Benefit Analysis
- Tax consequences
- Implementation steps
Click here for a 1 Financial Marketplace Associate insurance expert to assist you with your disability buyout insurance needs.
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