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Disability Buy-Out Insurance
Disability Buy-Out Insurance is designed to provide the necessary funds to enable one or more business owners to purchase the shares of a disabled shareholder or partner in the event of being disabled long term. Long term for some companies can be six months but normally partnership agreements address the issue after 12 months. This coverage provides sufficient funds to complete the buy-out while guaranteeing fair market value to the disabled shareholder or partner.
Small and medium sized companies having more than one business owner or a key-person should seriously consider obtaining Disability Buy-Out Insurance. What would happen if one of the main owners or key employees became totally disabled several or more months? This plan insures the disabled person is compensated by the plan and the remaining partners obtain 100% ownership of the business, paid for by the insurance, thereby allowing opportunity for future business success and eliminating the critical issue of ownership transfer.
Disability Buy-Out Insurance is ideally suited for owners of privately held businesses and is usually purchased in conjunction with partnership life insurance used to fund the buy-out of a deceased shareholder or partner. The plan provides a single lump sum payment and the issue limit is generally based on the fair market value of the business at the time of application. Most plans provide payment after a period of 12 or 18 months of total disability of the insured.
Currently, disability and critical illness products are looked to for this form of protection and where budgets permit both combined are quite dynamic. For further information concerning Disability Buy-Out Insurance contact Wise Financial Group Inc. toll free at 1-877-779-4731 or email info@companybenefits.ca.