Successful business transfer involves not only putting a buy/sell agreement in place, but also funding it.

As a 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 and disability insurance can be excellent choices for such funding.

Buy/sell agreements generally cover three events: each owner's death, retirement or disability. The first two are ideal circumstances 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. If you become disabled, a disability insurance policy will help to buy out your share of the business.

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 buyout in the event of an owner's retirement.

Don't stop short in business continuation planning! Fully fund your buy/sell agreements with the appropriate life insurance and disability insurance coverage. Please feel free to contact us for more information: (800) 925-2050.