The Myerson Agency specializes in working with our business-owner clients in creating Disability Insurance protection plans for purposes of covering
- The loss resulting from the long-term disability of a key employee.
- The funds necessary to create capital for a business-owner to buy-out his or her co-partner or co-shareholder under the terms of the Company’s buy-sell agreement.
Disability Key-Person Coverage
Disability Key-Person exists to protect the business in the event of a long-term or permanent disability of one of the key employees, whose absence from the business would create a severe loss to the Company. This could be the CEO or other Executive, a key salesperson, the Chief Engineer, or other individual who would be difficult to replace. While the death of such an employee is often protected with key-person life insurance coverage, businesses should equally look to funding key-person disability coverage, as the risk of a disability is far more likely than a premature death of a key-employee.
Buy-Out Disability Coverage
A business continuation plan, sometimes called a shareholder/partner agreement, should always contain language as to the course of action between the co-owners in the event of a long-term disability. Often, the agreement will call for the non-disabled owner to buy the ownership interest of the disabled partner. A properly funded disability buy-out insurance policy will provide the funds (or a significant portion of the purchase price) to implement the buy-out transaction without impacting the cash flow of the business.
The Myerson Agency has extensive experience in implementing disability buy-out insurance plans. They can be difficult to navigate, and often require particularly careful planning to effectively implement.