Buy-Sell Agreement Funding

Using Life Insurance to Fund a Buy-Sell Agreement

Being co-owners of a business means there is always a chance one of you could assume sole ownership one day. Sometimes this can happen if one co-owner leaves the business, whether by force or voluntarily. Other times, it happens when a co-owner passes away.

With your business partner and co-owner as the beneficiary of your life insurance funded buy-sell agreement, they will receive the death benefit and can use it for the good of the company.

How It Works

There are several ways to arrange the buy-sell agreement with life insurance, but each generally does the following:

• The business co-owner(s) or the company receives the death benefits from the deceased co-owner's life insurance policy
• The living co-owner(s) pay death benefit amount to the deceased co-owner's family or estate in order to purchase the deceased’s shares
• The deceased’s family or estate has cash to employ as needed