Disability Buy Out
Sharing ownership in a business has its own unique challenges, not the least of which is providing equity funding if one of the owners becomes disabled.
The question is: “If a business partner became too sick or hurt to work and could not return to the business, how critical would it be to the continuation of the business to have a plan in place and the means available to buy out the disabled partner?
For most businesses it would be very difficult to survive the effects of an owner becoming totally disabled without a properly financed buy/sell agreement.
Disability buy-out insurance provides equity funding by reimbursing the purchase of a totally disabled owners interest in the business under a properly structured agreement. This allows the remaining owners to continue the business with less interruption and little to no negative long term financial impact.