Email #7: "Buy/Sell - Fund with Life Insurance"

—  Funding your Succession Plan with Life Insurance

Subject Line: "Funding your Buy/Sell Agreement with Life Insurance"

Dear ~Contact.FirstName~

Business continuation after an owner's death or retirement can be codified in a Buy/Sell Agreement funded by Life Insurance.

Life Insurance can assure a smooth transition of the business when used as the funding mechanism of the Buy/Sell Agreement.

Retirement Buy/Sell


DEFINITION of 'Transfer-For-Value Rule': The stipulation that, if a life insurance policy (or any interest in that policy) is transferred for something of value (money, property, etc.), a portion of the death benefit is subject to be taxed as ordinary income. This portion is equal to the death benefit minus the item(s) of value, as well as any premiums paid by the transferee at the time of the transfer. For example, if John Doe sells his $250,000 life insurance policy that he has paid $10,000 in premiums on to Jane Doe for $5,000, the amount subject to income tax is $235,000 ($250,000-$10,000-$5,000). Investopedia

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A Succession Plan often involves a Buy/Sell Agreement. Life Insurance provides assurance of a successful financial transition in the event of the owner's death or retirement.