The stockholders or partners of any business should agree upon some plan that will assure as well as insure liquidation of business interest on a compatible basis with the welfare of the surviving owners and sufficient to give the heirs the funds equal to the deceased's interest.


Life insurance guarantees the completion of the fund. Life insurance furnishes the exact agreed amount at any time, even if death occurs early. Life insurance means absolute solvency of the fund at all times,  Life insurance assures a large and constant rate of return on the accumulated funds. Life insurance relieves all parties from the troubles of investment managerial care.  Financed by life insurance, all uncertainties are converted into certainty.  Being mathematically sound, absolutely effective in the prompt fulfillment of the promise to pay, efficient in management, free from all investment cares and fears, and as reasonable in cost as any plan that can be proposed, the life insurance methods of financing a buy-sell or business continuation arraignment is without a competition. 

Other Reasons to create an agreement and fund it with life insurance-

§          It frees heir from the hazard associated with a business interest and furnishes to them the agreed amount of cash promptly, fully, and in usable form.  

§          It protects heirs against the acts of surviving owners and the surviving owners against the acts of the deceased's heirs.  

§          It maintains the business intact and enhances the confidence employees and others outside the business. 

§          It helps to settle the estate of the deceased partner or stockholder as it provides the immediate funds to meet the immediate needs of the estate.