What is a buy – sell agreement?  A legally binding contact that can be used with all types of businesses, both large and small.  It stipulates that, upon the death, retirement, disability, or other withdrawal of a principal.  The insured must sell –  at an agreed upon value, maintaining the value to the insured’s estate and guaranteeing a purchaser.

There are two ways life insurance can be used to fund a buy-sell agreement

  1.  cross purchase  – means one owner owns a policy on the other and is the beneficicary.   Upon the death, the living owner gets the proceeds and buys the shares from the deceased’s estate.
  2. Stock  redemption – the company owns all the policies on all the owners, pay the premiums, and receives the death proceeds.  Upon death, the company purchases the share and retires them.

You can also get Key Person coverage… How do you value a key person?

One person carries a life insurance policy, pays the premium, and is listed as beneficiary.  The death benefit is paid to the company  when the key employee dies.

Please call Debbie Lewis today and get a quote for business partners or key employees…  979-220-3018