Your company’s success is dependent upon many people. In every business there are “key people” who are responsible for ensuring that success. The death of these key people would impact your company’s performance, so we offer policies to help protect you in the event of an untimely death of a defined key person through our Key Person life insurance policy.
The payout provides cash to continue operations until a replacement can be found, hired, and properly trained. The policy also provides funding to buy out the key person’s heirs, should ownership rights and equity stakes be involved.
Like individual life insurance policies, Key Person life insurance policies may be purchased as term life or permanent life policies.
Term life insurance covers the insured for a term of one or more years. It pays a death benefit only if the insured dies within that term. It may not be renewable at the end of the term or may cost considerably more to continue.
Permanent life insurance, which goes by several names, such as whole life, universal life, and variable life, typically includes both a death benefit and cash value. Because of the cash value element, premiums tend to be higher than for term life insurance.
If you own a business and are concerned about how the death, disability, or retirement of a co-owner might affect its operation, a funded buy-sell agreement can help by ensuring you will be able to purchase your partner's share, eliminating any doubts about the continuation of the business.
Buy-sell agreements offer other advantages, including assurance to lenders and investors of the continuity of the business, which may facilitate access to capital.
Buy-sell agreements are also known as business continuation agreements, stock purchase agreements, and buyout agreements.