Shareholder Life Insurance
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Shareholder Insurance is Life
Critical Illness and Disability Insurance to fund a shareholders agreement and allow the surviving partners to continue operating the business uninterrupted.
In short, the business will have the funds to buy out the shares of a critically ill, disabled or deceased shareholders estate.
Shareholder Insurance Agreement
A shareholders agreement outlines the various rights and obligations of the shareholders to each other. It will also outline how a shareholder can exit the agreement or what will happen in the event of critical illness or death.
The use of life insurance and health insurance to fund these obligations is a common and effective way to manage this risk.
It’s critical for shareholders’ agreements to address the possibility of a disability, illness or death. If shareholder insurance is not in place to fund their agreement – the wishes of the shareholders could end up being decided by the court.