If your business partner or key employee has a heart attack, stroke etc

Buy-Sell Planning

Many business owners think a buy-sell agreement is not

needed until the death of a business owner.

While it is critical to have a plan in place at that time, the

buy-sell is also important when any major life event

changes the relationship of one of the owners to the

business. Such an event could be disability, divorce,

retirement, conflict between owners, or the desire of one

owner to pursue another business opportunity. In each

case, having a buy-sell agreement in place can help to

mitigate conflict and speed up the transition by giving

business owners a road map for handling the event.

There are three Primary ways to fund a Buy-Sell Agreement:

Pay Cash

Requires large sums of liquid assets that may not be

readily available, particularly at the time of an unforeseen

event. May have to liquidate valuable personal or business

assets below market value in order to raise cash quickly.

Borrow

the Money

The loss of an owner or key person may impair the credit

rating of the business and its ability to borrow and put a

strain on the business budget.

 Plus interest must be paid. This could be a tremendous hardship.

Purchase a

Insurance

benefit for the purchase of the business interest.

Money is available from the policy cash values or death1

Life Policy

Policy cash values grow tax deferred and death proceeds

are federal income tax-free.

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Death Insurance or

Life Insurance for Life to fund Buy-Sell Coverage or Key Person

Planning ?

Most life policies should be called “death” insurance. With

the policies we offer through WRL, we can help safeguard

small business owners through life’s unpredictable changes

– we call it Life Insurance for Life!

What Can Happen to Us?

We may become Chronically Ill

Chronic Illness affects many people and can create

additional expenses for business. Some of these

expenses may include:

Nursing Home Cost for a Private Room

For nursing home care, the national monthly average is now

$6,266, which translates into $75,190 annually.

1

Assisted Living Facility

CHRONIC

ILLNESS

For assisted living facilities the national monthly average is now

$3,185, which translates into $38,220 annually.

1

Home Health Aide (Certified)

For Home Heath Aide, the national monthly average is now

$3,623, which translates into $43,472 annually.

What Can Happen to Us?

You may become Terminally or

CRITICAL

Critically Ill

ILLNESS

TERMINAL

STROKE

Every 40 seconds someone suffers a stroke.

1

HEART ATTACK

ILLNESS

Every 26 seconds someone suffers a heart attack.2

45% of heart attack victims are under age 45.

3

Did You Know…

3 out 4 people (75%) over the age of 40 will experience a

critical illness at some point in their future.

What Can Happen to Us?

You may become Terminally or Critically Ill

CANCER

Every 30 seconds a new cancer is diagnosed in the U.S.

1

1 in 2 men and 1 in 3 women will be diagnosed with cancer in their lifetime.

1

Did You Know…

From 1990 to 2008, spending on cancer care soared to more than

$90 Billion from $27 Billion.

2

One in four cancer patients or their families said they used up all or most of their

savings to pay for treatment.

2

One in eight people with advanced cancer turned down recommended care

because of cost.

ABR: Terminal Illness

Terminal illness is determined by a condition resulting

from injury or illness which, as determined by a

physician, has reduced life expectancy to not more

than 12 months (no more than 24 months in TX, GA,

IL, MA, and WA).

This allows the insured to access up to

$500,000) of the policy’s death benefit in the event of a

terminal illness100% (max of

ABR: Chronic Illness

Chronically ill is being unable to perform 2 of 6 activities of daily

living without assistance from another person or being cognitively

impaired.

90 day waiting period

Up to 2% of death benefit accessible per month

Max lifetime benefit is 90% or $500,000 (whichever is less)

The policy must be inforce for 2 years before benefits are available

ABR: Critical Illness

Allows the insured to access his/her death benefit if they are critically ill

Critical Illness includes diagnosis of cancer, heart attack, stroke, ALS, kidney failure, and major

organ transplant

Max lifetime benefit is 90% or $500,000 whichever is less

Benefit is paid out in a lump sum and the amount of money you will be able to receive is

dependant on the severity of the critical illness.

Policy MUST be in force for 30 days prior to claim.

Living Benefits when you need them

most to protect your business!

Key Person insurance can be used to:

Keep lines of credit open

Train another employee for the same specialized skills

Hire new expertise

Assure the completion of ongoing project and initiatives

Provides access to policy cash value through loans and withdrawals, which your

business can use to meet unexpected business expenses.*

While you can never replace your key people, you can protect your business from

experiencing financial loss at their death.

*Policy loans and withdrawals reduce the policy's cash value and death benefit and may result in a taxable event.241Loans and withdrawals will affect the cash value of the policy and could affect the death benefit. Amounts received on withdrawals and