Buy Sell Insurance

What is Buy/Sell Insurance?

Buy/sell insurance is part of a business succession agreement and is used to fund the departure of an equity owner from a business should they suffer a defined illness or death. Every business needs to have a plan if one of the owners was to be incapacitated or dies. These are departures which can be sudden and unexpected. 

The business succession agreement details the arrangements for the departing owner/ partner to receive their equity so the remaining owners/ partners can continue running the business without the need for a forced sale. The buy/sell insurance funds the payout of the equity and can be used to extinguish any debt owed by the departing individual.

Key Issues to Consider

A business succession agreement usually involves the accountant, lawyer, and financial planner. It requires the following issues to be addressed:

  • A valuation of the business
  • Calculation of the insurance sums and completion of policies
  • Drafting of a legal agreement
  • Annual review process

Financial Life has access to a large number of different policies and insurers and can put in place the appropriate business succession and buy/sell insurance cover for your needs.

To find out more about business succession and buy/sell insurance please phone Adam Stewart on (07) 4639 1268.

Financial Life Pty Ltd (ACN 107614415) is an authorised representative of AMP Financial Planning Pty Limited, Australian Financial Services Licensee

AMP

DISCLAIMER
Any general advice in this information does not take account of your personal objectives, financial situation and needs. Read the relevant Product Disclosure Statement before acquiring any product mentioned on this website.