Successful business owners know exactly what hard work and dedication it takes to build a business and make a profit. A huge factor of being a profitable business is adequately protecting your business for the long term. This means getting the appropriate Business Continuation Insurance coverage. These policies are designed to protect you, your partners and your key employees, should someone decide to leave the business by way of separation, retirement or death.
It is very common to have at least one business partners, but a lot of businesses today have multiple. These partners may not be equal shareholders, either, which is why protecting everyone’s business share is important. A Buy Sell Agreement is one very important line of coverage that you must have if you’ve got at least one business partner.
A Buy-Sell agreement is created by your attorney and most typically funded with life insurance. Its purpose is to protect partners’ share of the business. If one of the business owners dies or leaves the company, what’s going to happen if you aren’t protected? I’ll tell you what- every family member they have (8th and 10th cousins, even) who have heard about this profitable business will be coming out of the woods. Probably not, but immediate family sure can and will. They aren’t just going to give the share of the business back to the other partner, in exchange for nothing. Without a Buy Sell Agreement in place, they just may decide to take over their deceased loved one’s half by being the new, snazzy replacement. I can already tell you how that’s going to pan out…
If you have created a Buy-sell agreement, that’s great, but it’s only half the battle. Now it must be funded. What’s the easiest way to do this? With life insurance, of course!
For more information about obtaining a life insurance policy to fund your Buy Sell Agreement, contact us today. Don’t forget to read our Blog about Buy Sell Agreements: Handshakes are so 1980: Why you Need a Buy Sell Agreement
As one of the most experienced brokerage companies from San Antonio, Texas, we are eager to help you save money and secure the future of those you love.
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