Why do you need Partnership Insurance?
If one of your partners had to pass away or become disabled, his share of your company would go to his beneficiary:
- Does this beneficiary have good business sense?
- Is he or she interested in being part of your business?
You may be left with not only the burden of an incompetent partner, but also the expense of having to find a replacement to do the job that your deceased partner used to do.
The best way to overcome this problem is through a “buy and sell agreement.” This enables the surviving partners to purchase the deceased partner’s share at a previously agreed amount. A buy and sell agreement, also has life insurance attached to it, so that you have capital to buy out your deceased partner’s share. The insurance policy is set up so that remaining partners own the insurance policy and are also the beneficiaries of the insurance policy. The type of agreement would cover the permanent disability of a partner in exactly the same manner
Buy and sell agreements are win-win for both the partners and the beneficiaries. MST offers small and medium sized business a Business Needs Audit to assess your requirements and make recommendations. Contact MST today to request a Business Needs Audit for your company.