Sole Proprietor Buy-sell Plans «HD 2026»

: Life insurance is the primary funding mechanism because it provides immediate cash when needed to activate the sale. How the Funding Works

: The buyer (e.g., the key employee) typically owns the policy on the life of the proprietor and is the named beneficiary. sole proprietor buy-sell plans

: The business often "bonuses" the premium payments to the employee, who then pays the insurer. Tax Considerations : : Life insurance is the primary funding mechanism

: Typically a key employee , a family member, or even a competitor. a family member

Life insurance ensures the buyer has the funds to fulfill their legal obligation to purchase the business.