Howdy Partner ! Now let's imagine for a minute that you and I actually was partners. Partners in business. Now, one problem, of course, is that if one of us died, why, we'd end up being in business with the deceased partner’s kinfolk. If I died first, you’d end up in business with my son Jethro. And Jethro, well, he’s a dope.
One solution, then, might be a buy / sell agreement funded by life insurance. This is where the company takes out a joint first-to-die life insurance policy on both of our lives. Then, if one of us died, the death benefit would be paid into the company’s capital dividend account, and from there it would be used to buy the shares of the heirs. If I died first, you’d end up with the entire company…and no Jethro.
So if you’re really in business, and you really have a partner, perhaps you should be considering who you are really going to be in business with if your real partner dies. Do you want to be in business with your partner’s spouse or children? If not, how will you buy them out?
Life insurance is the best tool there is for dealing with the financial problems created by a death. While it could take you years to accumulate enough free capital to buy out a deceased partner’s heirs, a life insurance policy would cover that problem off as soon as the coverage is approved.
For more information about the uses of life insurance, visit http://www.chericrause.com/insurance1.htm
About The Author
Rick Hoogendoorn is a life insurance agent in Victoria, British Columbia. This article is not meant to replace personalized insurance planning advice from your local professional. Rick is a Certified Senior Advisor and is currently creating www.seniorsvictoria.com.
rick.hoogendoorn@shaw.ca
