How to sell term life insurance
Buy-Sell Life Insurance Quotes
According to the Small Business Administration article Transferring Management in the Family-Owned Business. ‘…At any given time, 40 % of U. S. businesses are facing the transfer of ownership issue. Founders are trying to decide what to do with their businesses …’ And this is coupled with the fact that about 50,000 Americans are reaching retirement age every week;[i] and that in addition to needing retirement income, the cost of long-term care for two spouses could be in the hundreds of thousands. For many business owners, family members, partners, and even key employees, the buy-sell agreement offers some solutions.
Business and Family Strategic Planning is the first logical step to preparing for future events and achieving desired goals. If you are faced with transferring business assets, shares, or interest; or if you are in a partnership or share owner-ship in an LLC or Closely-held corporation, you should research the buy-sell agreement. It is often difficult to deal with letting go of something that you had an integral part of creating and building; however, if you do not address the issue of transferring your assets while you are able, then someone else will do so when you are no longer able to make the choices.
A Buy-Sell Agreement is a contract that provides for the transference of your business interest or for your purchase of another’s share in the business. Buy-Sell arrangements are also known as business continuation agreements and business buyout agreements.
These contracts can protect the company’s continuity, as well as fulfill the departing (as decorously as possible – I mean ‘dead’ or ‘alive’) owner’s exit strategy legally. The buy-sell agreement consists of at least two parties, whereas upon a ‘triggering event,’ one party sells a defined portion of their business interest to another party. Typical and legal ‘triggering events’ include the death, disability, divorce, incapacity, or retirement of at least one of the co-owners.
A standard Buy-Sell Agreement will include the date, defined the parties, and specify the terms of the contract including: the precise ‘event(s)’ which will ‘trigger’ the agreement, the number or percentage of shares to be transferred, the persons who will receive that interest, and the persons who will receive benefits for that interest and the terms and descriptions of those benefits. There are several different types of buy-sell agreements, including: entity purchase; cross purchase; one-way buy-out; and wait and see arrangements.
- PURPOSES. A business owner is concerned about:
- How the death of a co-owner might affect the company’s operation.
- A partner’s spouse/children taking control of the company.
- How a partner’s disability could affect the company.
- The continuation of their company.
- How much money their family will receive from the sell of their business upon their death, disability, or retirement.
- A succession strategy; and/or who will take over their company.
- TYPES OF BUY-SELL AGREEMENTS :