A disability buy-out agreement is designed to provide the company owners with the money they need to purchase a disabled owner’s interest in the company at a mutually agreeable price and at the correct time. A disability can be caused either by an accident or an illness that would prevent the individual from fulfilling his obligations in the company by being unable to perform in his occupation. By purchasing the policy before the disability strikes, the business can provide a mutually agreeable solution to a very difficult situation.
The advantages for the disabled owner include:
The advantages to the active business owners are:
The premiums are not tax-deductible and any benefits paid to the company are received tax free. Funds paid to the disabled owner, are however taxed as a capital transaction.
Along with our new partner on board, Financial Solutions Link, we are able to conduct a full analysis of the business and each business owner’s interest in the company and provide solutions for your specific business needs.