Buy And Sell Insurance

Buy / Sell Arrangements.

Buy / Sell business arrangements are used by business owners who want to ensure that, if they depart from the business by an involuntary event such as death, disability or serious illness, the succession of the business has been considered.

To determine the level of cover that you and your business partner/s may need, consider the value of each owner’s share of the business. This value amount should generally reflect the sum insured on the buy and sell life insurance agreement. It is important that the business owners review this amount on an annual basis to ensure adequate cover is in place.

For example, if the business has two owners and each has an equal share of a business with a value of $2 million, the amount insured on the life of each partner should be $1 million on a buy/sell life insurance agreement that will provide cover for death, TPD and possibly trauma.

For comprehensive cover details and for information on our insurance underwriter, please get in touch with the Smart Private Wealth team.

Important considerations

Requirements of the buy/sell agreement (Eg, type of cover, amount of cover
Who owns the insurance policy

Income tax including ability to deduct premiums and accessibility of the proceeds

CGT (capital gains tax) on the proceeds