We “shop the market” to find you the best insurance value
We work for you, not the insurance companies.
We design a plan to fit your budget
We do a thorough analysis to balance needs versus budget.
We can find coverage for your lifestyle
Hard to place risks is one of out specialties.
Most common Denver Buy-sell Life Insurance questions from our clients
What are the advantages of Life Insurance funded Buy-Sell agreements?
- Current business owners remain in control and avoid the intrusion of new and inexperienced owners or the need to invite a spouse or other heirs Into the business.
- Business continuity is assured, maintaining employee morale and the firm’s goodwill
- Business owners are assured of the right to buy the deceased owner’s business interest at a predetermined price.
- It enables the surviving owner(s) to avoid the need to obtain credit to purchase the interest.
Are all Buy-Sell agreements the same?
NO, buy-sell agreements generally fall into board categories:
- entity plan agreements
- cross-purchase plan agreements
The primary distraction between the two if the party that will be responsible for purchasing the deceased owner’s interest and pay the insurance premium. An Entity Plan Agreement is an agreement in which the business agrees to purchase the business interest and the life insurance policies. This is best for an organization with multiple owners.
In a Cross-Purchase Agreement, the owners commit to buy/sell their interest at the time of his/her death to the surviving owners. The owners (usually no more than 3) commit to purchasing life insurance policies on each other.
What type of life insurance policy is best to fund a Buy-Sell Agreement?
As with all life insurance purchases, the decision is a balance of needs vs cost. Universal Life or Indexed Universal Life often is the most desirable form of life insurance because of its permanent nature and it’s premium and death benefit flexibility. Premium payments can be decreased or suspended or suspended during periods when cash flow is low. Whole Life Insurance is also recommended as it provides guaranteed cash values, unlike all other policies. If cash is an issue, then Term Life Insurance may be the best answer.
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