A buy-sell agreement sets out how a partner’s stake is transferred if they die or become disabled. Insurance funds it, so the surviving partners can buy the share without draining working capital — and the departing family receives fair value promptly.
The agreement and the policy must be structured together. One without the other tends to fail exactly when it is needed.
Who needs this cover
- Partnership firms and LLPs
- Closely held companies with multiple shareholders
- Family businesses planning succession
Key benefits
- Liquidity to execute the buy-sell agreement
- Fair value to the departing partner's family
- Continuity of ownership and control
- Avoids a forced sale or external buyer
What is typically covered
- Death benefit funding the share purchase
- Optional disability funding where included
Eligibility
- A documented buy-sell or partnership agreement should be in place
- Valuation basis agreed between the partners
Key exclusions and limitations
- Standard life insurance exclusions
- Cover mismatches where the valuation is not reviewed periodically
Exclusions differ between insurers and product variants. Always read the policy wording for the exact list.
Claim information
We coordinate between the insurer, the surviving partners and the family so the agreement and the policy proceeds move together.