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Successful business
transfer involves not only putting a buy/sell agreement in place, but
also funding it.
As a small-business
owner you no doubt understand the importance of having a buy/sell agreement
in place to handle the transfer of a business. But you may not realize
that the legal document alone is not enough? Funding must be provided
for the buy/sell agreement. Life insurance can be an excellent choice
for such funding.
Buy/sell agreements
generally cover three events: each owner's death, disability, or retirement.
This is an ideal circumstance for permanent life insurance. Not only are
life insurance proceeds available at your death, but a nest egg - the
policy's cash value - is accessible should you retire or become disabled.
If you are older and
conservative, you may prefer permanent life insurance with guarantees,
such as whole life insurance. If you are younger and more of a risk taker,
you may prefer to explore alternative permanent insurance options.
If the higher premiums
of permanent life insurance are out of reach for the time being, the business
or key parties may use term life insurance to cover the death contingency
and set aside other funds to provide a down payment on a buy-out in the
event of an owner's diability or retirement.
Don't stop short in
business continuation planning! Fully fund your buy/sell agreements with
the appropriate life insurance coverage. Please feel free to contact us
for more information: (800) 925-2050.
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