BUY-SELL AND KEY-MAN INSURANCE Buy-Sell Arrangements – make sure that if your partner dies you don’t end up with their spouse or child as your new business partner sharing in the decision making and profits.Legal documents for a Buy-Sell arrangementFunding your Buy-Sell with Life Insurance in case of untimely deathFunding your Buy-Sell with Disability Income Insurance in case your partner becomes disabled and your business has to keep sharing profits with non-working partnerKey-Man Insurance – Key Man Insurance is critical for companies that depend on a few “Key People” to generate a large portion of the company’s revenue. The absence of one of these individuals usually results in the death of the company.Comparison of the three insurance types to be considered.Term – least expensive option. Only lasts a specified amount of time. Generally convertible to permanent if desired or needed. Does not build-up cash value.Return of Premium Term – Same as term but returns premium (no interest) if you out live the term.Universal Life – next in price category. One of the benefits of Permanent insurance is that it can serve different purposes. After your Buy-Sell needs come to an end, you can change ownership and utilize it for future needs, i.e. income protection, potential estate tax planning, utilize the cash value, etc. Buying a new policy for the family later in life would cost more because of age and you run the risk of being rated or uninsurable.Whole Life – most expensive in price category. Excellent vehicle to build cash value and the policy is designed to pay for itself in the future and death benefit can increase. Plus the benefits of permanent insurance sited above.