Funding Methods

Most business owners recognize the importance of having a business succession plan. Whether that plan is in place to protect the value of the business for their survivors, supplement retirement savings, or protect against financial loss due to the death of a key employee, the proper mix of life insurance products are essential. These life insurance products are important funding mechanisms that allow businesses to perpetuate without disrupting their day to day operations.

Many businesses will utilize a buy-sell agreement to address the various circumstances that might occur when dealing with the exit of a principle from the business. A fundamental part of a buy-sell agreement is determining how to fund it in terms of death, disability, or retirement of that principle. For some businesses a key person life insurance policy maybe the cornerstone funding mechanism used for dealing with the death of a key employee. While other businesses may utilize life insurance as an alternative to augment the retirement funding vehicles they may already have in place.

Regardless of which life insurance product is utilized, the fact remains that many business owners do understand the need to retain cash in their business after an unexpected loss for purposes of liquidity, credit stability, and essential planned growth. A properly funded business succession plan can do just that. Through our life insurance carrier affiliations, we have the capability of assisting business owners in putting together a funding program that optimally serves their business needs.