Your company may have life insurance to help protect the organization against adverse financial consequences that may result from a partner’s death. However, you shouldn’t overlook, and fail to plan for, a partner’s disability. A disability could make continued ownership of a partnership in a business all but impossible.
Disability buy-sell is designed for small business owners to provide funds for the purchase of the insured’s share of ownership in the business in the event he or she is totally disabled. The policy is primarily designed for small partnerships and professional corporations. The owner may be the business, a trust, or each owner may own a policy on the other owners. The existence of a formal Buy-Sell agreement is required.
For purposes of the buy-sell agreement, a disability buy-sell policy provides a definition of total disability and allows the insurance carrier, as a third party, to determine if a disability has occurred.
Prefer to speak to someone about a disability buy-sell policy?
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These policies have exclusions and limitations. For costs and complete details of coverage call your agent.