BBozajian-City-SteepleBusiness Succession

Key Employee Coverage

If you have key employee whose skills, expertise, client base or other unique attributes make him or her a valuable asset to your business you may want to consider Key Employee life insurance.  Typically these employees maintain important client relationships, hold major accounts or simply have information about the functioning of the business that no one else has.  If this employee were to die prematurely he or she would be difficult to replace.  A life insurance policy purchased on the life of this employee would protect the business by providing funds that can be used to find a replacement.

Buy-Sell Funding

Cross Purchase Agreement: A type of buy-sell agreement formed between the owners of a business to purchase and own life insurance on the lives of the other owners.  Each owner pays the premiums and are the beneficiaries of the policy. The face amount of the insurance would be calculated based on the other’s ownership interest. Upon the death of one owner, the insurance proceeds would be used to purchase the ownership interests from the deceased owner’s estate or family.
Stock Redemption Agreement: A type of buy-sell agreement that binds the corporation to purchase a shareholders interest at their death. The corporation applies for, pays the premium and is the beneficiary of a life insurance policy on the lives of all shareholders. The amount of insurance depends on the purchase amount required to redeem the shares of each individual shareholder.

Salary Continuation Plans

A plan to replace the salary of a disabled business owner or employee, funded with disability insurance.

Business Overhead

If you are a professional that owns your own practice you may have already secured personal disability insurance to protect your income but have you thought about what will happen to your practice while you are out of work.

Because most disabilities are not permanent you will want your doors to remain open during your absence. This means overhead expenses will continue: rent, salaries, utilities, insurance, etc. A Business Overhead Expense policy is designed to pay these expenses while you are disabled.


Business Succession Information: