Businesses commonly use life insurance as a funding mechanism for buy-sell planning and insuring key employees. Since death is a common trigger in a buy-sell agreement, life insurance, when used as the funding mechanism for the agreement, provides the immediate liquidity to fund the buyout when the need arises. It’s an elegant solution, but complications do arise. When they do, it’s usually a question of whether the insurance is being managed, monitored, and serviced as it ought to be.
When an event changes the nature or outcome of your business, it’s important to review your insurance alongside your buy-sell agreement so both can accommodate the changes and continue to work together.
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Assurance, tax, and consulting offered through Moss Adams LLP. Investment advisory services offered through Moss Adams Wealth Advisors LLC. Insurance offered through Valmark Securities Inc. (VSI), member FINRA & SIPC. VSI is a separate entity from Moss Adams.
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