Life Insurance for Nevada Business Partners

A buy-sell agreement is a legal contract that determines what happens to a business when an owner dies, becomes disabled, or wants to leave. It pre-sets the price and terms, and life insurance provides the cash to execute the buyout.

In cross-purchase, partners own policies on each other—proceeds go to surviving partners to buy the deceased's share. In entity-purchase, the business owns policies on all partners—the business itself buys the shares. Cross-purchase often has tax advantages but gets complex with many partners.

Coverage should equal each partner's ownership value. For a business worth $2M with two 50/50 partners, each needs $1M coverage on the other. Regular valuations (annually or per significant events) ensure coverage keeps pace with business growth.

Younger partners pay higher premiums to insure older partners. "Split-dollar" arrangements can equalize costs—the business pays part of premiums, making it fair regardless of age differences.

Without a buy-sell, the deceased partner's share typically passes to their estate—meaning their spouse, children, or heirs become your new business partners. This rarely ends well for anyone involved.