Protect your Business Interest with a Buy/Sell Agreement
Benefits and investments for business owners from Pelee Lighthouse Financial

Business Owners

  • Who will inherit or buy your business?
  • Where will the money come from to buy-out your partners ownership?
  • What would happen to your business if you die, or are unable to work due to a critical illness or injury?


You and Your Business

As a business owner, you may rely on a number of key people for the successful operation of your company. Many businesses have been built around the strengths and skills of a few individuals whose capital, energy, knowledge, or experience make them a valuable asset of the organization.

What would happen should your key person become ill or even worse, pass away? Would your business suffer from the loss of knowledge, expertise or management capability of that person?

Key person insurance is a life insurance policy maintained by the company on the life of an important partner or employee. It provides funds to partially offset the economic cost to the company of losing such an employee. It may also provide:

  • A stabilizing factor to keep the business running.
  • Reassurance to creditors to keep channels open.
  • A death benefit to the family of the deceased for a reasonable period of time
    to replace lost income.


Protect your Business Interest with a Buy/Sell Agreement

If you are a partner in a business or a major shareholder in a company, you should consider drawing up a buy/sell agreement. This type of agreement is between shareholders or business owners that provides for a smooth transfer of ownership should a partner become disabled, critically ill, retire or die.

The right combination of life insurance, critical illness and disability insurance are fundamental parts of buy/sell agreements because they can provide immediate funds to the surviving partners to buy out the deceased or disabled partner.


Benefits of an insured Buy/Sell Agreement:

  • The business’ working capital remains untouched.
  • The owner’s business has a guaranteed market at a fair price.
  • Heirs obtain a definitive value for the deceased partner’s interest.
  • Surviving partners obtain total and unrestricted ownership of the business.
  • The business is ensured that the death, disability or retirement of a business owner will not disrupt daily business operations.