Buy-Sell Agreement

Protect your business’s value and ensure continuity with buy-sell agreement insurance, securing smooth transitions if an owner departs or cannot serve.
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Ensuring Business Continuity

A buy-sell agreement is a legally binding contract that outlines the terms and conditions for transferring a business interest or ownership stake between parties. It comes into play under specific circumstances, including death, disability, retirement, or voluntary withdrawal. This agreement serves as a preemptive measure, ensuring that the business remains stable and the transition of ownership is seamless, preventing potential disputes among remaining owners and ensuring that the business’s strategic direction and operations continue uninterrupted. Additionally, it provides a clear mechanism for valuation and sale, offering security and predictability to all parties involved, thereby protecting the business’s overall value and the interests of both departing and remaining owners.1

Business team in an office looking at documents

Cross-Purchase
Entity-Purchase
Wait-And-See
Cross-Purchase Agreement

A cross-purchase agreement empowers company partners and shareholders with the legal framework and financial means to acquire the interest or shares of a partner who retires, becomes incapacitated, or passes away, ensuring smooth business transitions and continuity in the face of such events.1

  • Preservation of Business Continuity — Facilitate seamless operations by enabling remaining partners to acquire departing partners’ shares due to retirement, incapacity, or death, preventing disruptions.
  • Tax Efficiency — Access potential tax advantages by allowing purchasing partners to utilize life insurance proceeds for the buyout, potentially minimizing capital gains taxes and maximizing retained business value.
  • Fairness and Clarity in Ownership Transition — Foster fairness and transparency among partners, reducing conflicts over share valuation and distribution.
  • Estate Planning and Asset Protection — Ensure asset protection and orderly ownership transfer, providing peace of mind for partners and their families regarding the business’s financial security.
Entity-Purchase Agreement

Commonly known as a stock redemption plan, an entity-purchase agreement is employed by businesses with multiple owners, entailing the company’s acquisition of insurance policies for each partner, valued equivalent to their stake. In the event of an owner’s incapacitation or demise, the accumulated sum is utilized to purchase their share of the business.1

  • Streamlined Ownership Transition — Ensure a smooth process to buy out a partner’s share in case of incapacitation or death.
  • Safeguarded Business Interests — Protect the business’s interests by ensuring ample funds for buying out a departing owner’s share.
  • Tax Optimization — Access tax benefits to remaining owners, potentially minimizing capital gains taxes and optimizing financial outcomes during ownership transitions.
  • Enhanced Business Control — Maintain ownership control for strategic planning and management stability through outlined procedures for executing ownership changes.
Wait-And-See Buy-Sell Agreement

This form of buy-sell agreement insurance provides flexibility for business owners, allowing them to defer their choice of insurance type until a partner retires, becomes disabled, or passes away.1

  • Flexible Decision-Making — Make informed decisions by delaying the selection of insurance types until a qualifying event occurs, ensuring timeliness and accuracy.
  • Deferred Financial Commitment — Preserve liquidity for strategic resource allocation by delaying insurance policy selection.
  • Customized Insurance Selection — Tailor insurance choices based on partner health, business valuation, and financial resources, ensuring optimal coverage and cost-effectiveness.
  • Risk Mitigation — Minimize exposure to unforeseen risks, enhancing business and owner security.

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Insurance Services are Not a deposit, Not guaranteed by the Bank, May Lose Value.