If your business partner dies as a result of their illness or injury, you have the option of a share buyout.
You can design a company Buy Sell Agreement to activate when your business partner falls ill, due to cancer for example, with Critical Illness Insurance.
I’m generally not a big fan of illness buyouts, depending on the situation of course. This is because in many cases, a cancer survivor will return to work within months of the initial onset of the disease. In other words, your business partner’s diagnosis of cancer will trigger the buyout, and a year later, they’ll be back to working at ninety percent capacity. This makes the buyout a very bad deal for them.
A more probable scenario is that the cancer leads to their passing, thereby triggering the Buy Sell Agreement. With Critical Illness Insurance, you’ll be able to buy out their share(s) from their estate (refer to Part 1 HERE).
Stick around for next week’s installment, where we’ll discuss what type of Life Insurance is right for you