Funding business succession with buy-sell insurance
The Citizen|November 30, 2024
As a business shareholder, safeguarding the continuity and profitability of your company in the face of unforeseen events is likely a key concern for you and your co-shareholders.
Erin White

Many shareholders use buy-sell insurance as a strategic funding tool to facilitate the transfer of shares should a shareholder die, become disabled, or suffer a critical illness.

This article delves into how buy-sell insurance serves as an effective funding mechanism, ensuring smooth transitions in business ownership and securing a workable succession plan for all involved.

Different from key person insurance, buy-sell assurance is long-term insurance taken out by business partners on each other's lives to cover risks such as death, disability, or critical illness, depending on which set of circumstances they wish to insure against.

Should a shareholder die, those remaining will likely need access to capital to purchase the deceased partner's shares, which is where buy-sell insurance becomes invaluable.

Without this funding, surviving shareholders may struggle to finance the purchase, leading to the deceased's shares devolving to heirs through the estate, which can complicate ownership and control.

هذه القصة مأخوذة من طبعة November 30, 2024 من The Citizen.

ابدأ النسخة التجريبية المجانية من Magzter GOLD لمدة 7 أيام للوصول إلى آلاف القصص المتميزة المنسقة وأكثر من 9,000 مجلة وصحيفة.

هذه القصة مأخوذة من طبعة November 30, 2024 من The Citizen.

ابدأ النسخة التجريبية المجانية من Magzter GOLD لمدة 7 أيام للوصول إلى آلاف القصص المتميزة المنسقة وأكثر من 9,000 مجلة وصحيفة.

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