Business Life Insurance Tips
Your business can use life insurance in several ways. Here are some tips that can help you maximize the benefits to your business:
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Funding a unilateral buy sell agreement
Ensure the continuity of your business by enabling your managers to take ownership when you pass away. |
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Funding a unilateral buy sell agreement
If you own a business but do not actively manage it, you can help ensure its continuity after you have passed away by making it possible for your professional managers to take over your ownership.
A simple way to do this is with a unilateral buy sell agreement, under which your managers agree to purchase your interests in the business when you pass away.
You can fund this agreement with a life insurance policy on yourself, naming the managers as beneficiaries. You will probably want the managers to own the policy—and perhaps pay the premiums, too. When you pass away, the managers will receive a tax-free benefit from the policy, enabling them to complete the purchase.
In this way, your family will also benefit because they will be assured of receiving payment for your interests in the business as quickly as possible.
Depending on your needs, you can select term or permanent life insurance to fund a buy sell agreement. Your licensed insurance advisor or one of our insurance representatives can help you choose the solution that's right for you.
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