When an owner of a business dies or becomes disabled, often the surviving business partner/s will desire ownership and control of the business, and the deceased’s family will want funds to maintain their lifestyle. Buy-sell insurance can provide the money for this. It allows the surviving business partner/s of a business to buy out the deceased owner’s interest in the business.
Buy-sell insurance should be considered in conjunction with how much personal insurance a person needs.
Most business owners don’t leave their tangible assets (buildings, plant, equipment and stock) uninsured for a single day. Yet it is not their tangible assets, but themselves, their business partners and their key people, who make the business successful.
So, the question is not whether to insure business partners, for the need to protect them is obvious. The question is only: How much insurance should you have on them? Or, how much is a business partner worth?