The advantages of a buy-sell life insurance agreement are many, starting with the psychological comfort – the peace of mind business owners want, and deserve to receive – that ensures a company (and its employees) have the necessary protections, to stabilize the operations and overall costs of keeping a business running.
A buy-sell life insurance agreement may also provide a business with money, priced at a fair market exchange rate, to maintain cash flow and preserve the fiscal health of a company. This buy-sell life insurance advantage is significant because, without this type of life insurance coverage, a company may be unable to meet the daily costs of doing business, managing expenses, reimbursing third-party vendors or distributors, and funding everything from health care to paying taxes.
In addition to the tax advantages of a buy-sell life insurance agreement, this policy is a way to further a fair and timely transfer of assets, wealth, ownership of a business and various leadership responsibilities. For the heirs of a buy-sell life insurance agreement, this coverage guarantees that there is a buyer for the assets an heir (or a group of heirs) may be unable to handle.
Lastly, a buy-sell life insurance agreement gives a set of designated heirs the money to pay debts associated with an estate, or other unexpected costs, fees and taxes.