Disability Buy Sell Insurance
Intent:
Most Partnerships have Buy Sell Agreements in place, whereby a partner's share of the business may be purchased by the other partner(s) in the event of a particular life event. Most frequently we see agreements in place which deal with the death of one partner, funded by life insurance. If a partner should suffer a permanent disability, the need exists for the buy out of the unproductive partner, which can be funded by a Disability Buy Sell policy.
A policy may provide:
Policy characteristics:
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Waiting Periods typically begin at 365 days, 730 days not uncommon
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Benefit payout methods of Lump Sum, Monthly Installment or a combination of the two
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Disabled partner is generally considered to be unable to perform any duties of his occupation and no further services for the firm
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Benefit amounts can as high as $3 million with domestic carriers, substantially higher with Lloyds of London syndicates