A strong partnership builds a strong business—but when one partner becomes disabled, everything can change. Buy/sell disability insurance provides the funding needed to carry out a buy-sell agreement in the event of a long-term disability. It ensures that ownership transitions can happen smoothly, fairly, and without financial strain on the business or the remaining partners.
Frequently Asked Questions
What is buy/sell disability insurance?
It’s a policy that provides the funds needed to buy out a disabled business partner’s share of the company, according to the terms of a pre-existing buy-sell agreement.
Why is it important?
Without this coverage, the business or remaining partners may not have the liquidity needed to complete a buyout, leading to uncertainty or disruption.
How does it work?
If a partner becomes disabled and can no longer participate in the business, the policy pays out to fund the buyout of their ownership interest.
Who pays for the policy?
Policies can be owned and funded by the business or by the individual partners, depending on the structure of the buy-sell agreement.
Is this different from key person insurance?
Yes. Key person insurance provides working capital to offset operational disruption. Buy/sell insurance specifically funds the transfer of ownership after a disability.
Why it Matters
A well-crafted buy-sell agreement protects the interests of all partners. But without the funding to carry it out, it can fall apart. A long-term disability is more likely than premature death during working years, and failing to plan for it can put everyone at risk. Buy/sell disability insurance ensures that a disabled partner is fairly compensated while the business continues without disruption or conflict.
Who It's For
This coverage is essential for any business with multiple owners or partners. Whether you're co-owning a medical practice, a law firm, or a growing startup, this policy ensures continuity, fairness, and financial stability when a partner can no longer contribute to the business.
Make Your Business Agreement Work—No Matter What
Partnerships are built on planning and trust. Buy/sell disability insurance ensures that your agreement stands strong—even in the face of unexpected challenges. With the right policy in place, you can protect your business, your partners, and the legacy you’ve built together.
