Protect Your Business

Do you know that an individual disability income (DI) insurance policy can help protect your business in two ways? You can use it as a way to buy out a disabled partner or to help your company financially if you lose a key employee and, consequently, productivity due to disability.

DI to Buy

Properly structured, a DI buyout agreement or DI buy-sell arrangement can provide the funds to buy out a partner or co-owner in the event of a permanent disability as defined by the policy and agreement. The insurance policy usually includes an elimination period — the period between when the disability is identified and payments begin — of between a few months and a couple of years, with the longer periods resulting in lower premiums.

DI to Protect

Another way to financially protect your business is through key person disability income insurance. As with a buy-sell agreement, a DI key person arrangement will define what constitutes permanent disability, include an elimination period and ultimately provide the company with the cash flow necessary to keep the business running smoothly while the key employee is replaced.

The company can use benefits to recruit potential successors, pay for training and compensate the company for related financial difficulties. Talk to your insurance professional to learn more.