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Insurance Sales Tips for Selling Buy/Sell Funding

Name: Insurance Sales Tips for Selling Buy/Sell Funding
Uploaded: 2014-11-04T03:16:12+00:00
Duration: 1 min 15 s
Channel: Michael Viñal
Description: The video presents a sales pitch aimed at business owners with multiple partners under age 50, highlighting the high statistical risk that a partner will…

4 Nov 2014 · 1 min

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1:15

The video presents a sales pitch aimed at business owners with multiple partners under age 50, highlighting the high statistical risk that a partner will die (≈40%) or become disabled (≈70%) before retirement. It explains the financial dilemma that arises when a partner’s share must be bought out after death or disability, emphasizing the challenge of determining a fair price and finding the cash to fund the buyout. The speaker proposes an insured buy‑sell agreement as the solution, which combines a fair valuation formula with tax‑free funding through life or disability insurance. The narrative urges owners to discuss these issues promptly and consider implementing such agreements to protect business continuity and profitability.

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Here's the problem.
In any business with at least 2 owners under the age of 50, there's almost a 40% statistical probability that one of them will die before they retire, and almost a 70% probability that one of them will be disabled before they retire. Of course, with more than 3 owners, the probability is even higher. But here's the real problem: if one of your business partners dies or is disabled by cancer, a heart attack, or a traffic accident, they are still entitled to the same share of your company's growth and profitability until you buy out their interest. But how much will you be obligated to pay for their share of the business? And more importantly, what Where will you get the money to buy them out? Is an agreement made up of two parts: one, a fair and equitable valuation formula, and two, tax-free funding provided by insurance coverage. The solution is an insured buy-sell agreement. Of course, the right time to discuss these issues, to ask questions or make these decisions