In our last blog post, we discussed how does the buy-sell agreement works with two different approaches. Now we will discuss the funding of buy-sell agreements with life insurance.
Life insurance is an ideal funding source for a buy-sell strategy that is triggered by the death of a business partner. It is often the most affordable option when compared to a bank loan, a sinking fund, or an installment sale, and the death benefit provides liquidity precisely when the need arises: the death of a business owner.
Further, a permanent life insurance policy can accumulate cash value that can help fund a buy-out strategy upon retirement.
Next, we will discuss the benefits of buy-sell agreements.
Life insurance is an ideal funding source for a buy-sell strategy that is triggered by the death of a business partner. It is often the most affordable option when compared to a bank loan, a sinking fund, or an installment sale, and the death benefit provides liquidity precisely when the need arises: the death of a business owner.
Further, a permanent life insurance policy can accumulate cash value that can help fund a buy-out strategy upon retirement.
Next, we will discuss the benefits of buy-sell agreements.
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