What is Partnership Life Insurance in Texas
Reader’s Question:
I want to form a partnership with three of my friends. Is there a type of insurance that will protect us from dissolution in the event that one partner dies?
Bill
Dallas, TX
Bill, since more than two partners comprise your partnership, it is advisable that you have clear and definite rules in succession. Like, answer these questions for instance: Are your shares passable to family members in the event of an untimely death, or can one partner have the option to buy another’s shares in case he passes away?
Whatever conditions you decide upon, it will be looked at by the life insurance company when applying for a life insurance that will cover your enterprise.
Usually partnerships are structured in such a way that when one of the partners dies, the partnership is either dissolved, or the living partner has the option to buy his deceased partner’s shares. However, will the living partner(s) have enough cash at hand to pay for the amount of the shares of the deceased partner?
If you have a well-structured buy-and-sell agreement and are armed with a partnership life insurance, you, your partners and all your families need not worry about the company being dissolved. Having this kind of life insurance coverage will make sure you can continue your business.
So, don’t forget to call your agent there in Dallas for quotes for you and your partners.