Protecting YOUR business IS TOP OF OUR MIND

Protecting an owner or key employee from sudden loss or disability will help ensure the future success of the company. Without proper planning, a business may be forced to sell or claim bankruptcy without the right plan in place. To help plan for the unknown, our group will work with you to help create the right protection/succession plan for your business.

BUY/SELL AGREEMENTS

A buy/sell agreement (buyout agreement) is a legally binding contract in the event of either a sudden departure, disability or death of a business owner or partner. The agreement sets a pre-determined value of the business, and the company or surviving partners buys life insurance or disability insurance to help fund the agreements.

The two most common types of buy-sell agreements include:

Cross-Purchase Agreement
Each Partner in the company purchases life insurance on the other partners. If one of the partners passes away, the surviving partners use the proceeds from the life insurance policy to purchase the shares of the business from the deceased’s family.

Entity Purchase Agreement
The business, or entity, purchases life insurance on the partners of the business. If one of the partners passes away, the company/entity uses the proceeds from the life insurance policy to purchase the shares from the deceased’s family.

KEY PERSON AGREEMENTS

Key person insurance protects a business from a key employee either passing away or becoming disabled. The insurance will help the company survive even with loss of the key employee. The money received by the company will help the company hire new employees while dealing with potential loss of revenue.

The two most common types of Key Person Insurance are:

Key person Life Insurance
A life insurance policy paid by the company where if the key employee passes away, the company will receive the life insurance proceeds to help offset the loss of the key employee.

Key person Disability Insurance
A disability policy paid by the company where if the key employee became disabled, the company would receive the disability payments to offset the loss of the key employee.