Buy-Sell Agreement Life Insurance


Buy-sell life insurance is helpful for business partners that wish to keep their business running after the passing of one of the partners. So much of a business relies on the dependent relationship of a partnership, and if one of the partners passes, it is very important that there is a smooth transition to a new organizational system.

How Buy-Sell Agreements Work

The first thing that business owners need to do in this process is have a CPA evaluate the business. For example, a business could be valued at $2,000,000. If one business partner passes, the surviving partner will then need to buy half of the business (worth $1,000,000) from the deceased partner’s family. If the surviving partner does not have the money to pay for half of the company on hand, the deceased partner’s spouse or heir then becomes the legal partner. This is usually not beneficial for the business, because often the spouse or heir does not have the knowledge or skills to keep the business running properly.

How Buy-Sell Insurance Can Help

A buy-sell insurance policy can give the surviving partner the reserves he or she needs in order to “buy-out” the deceased partner’s family. Buy-sell insurance can give the business the resources it needs to transition well from partners to a single owner.

If you have any questions about how buy-sell insurance can help your business, give Rafail Insurance a call. Our agents will be happy to discuss any kind of insurance policy for your business with you and your business partner.

713-429-1790