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Michael E. Gray, Jr. of MEG Financial Qualifies For Membership In The Prestigious Million Dollar Round Table For The Eighth Consecutive Year

Outstanding product knowledge and client focused service has enabled Michael E. Gray, Jr. with MEG Financial to earn the coveted “Court of the Table” status with the Million Dollar Round Table.

Client centered service and value based solutions have enabled Michael Earle Gray, Jr. with MEG Financial, Inc. in Pensacola, FL to earn membership in the prestigious Million Dollar Round Table (MDRT) and the “Court of the Table” for the eighth consecutive year.

Achieving membership in MDRT is a significant career milestone and is attained only by elite financial professionals who have demonstrated exceptional knowledge, expertise and client fulfillment. The Round Table’s membership represents the “cream of the crop” for life insurance and financial service professionals worldwide.

About The Million Dollar Round Table

MDRT, The Premier Association of Financial Professionals, is an international, independent association of more than 33,000, or less than 1 percent, of the world’s best life insurance and financial services professionals. With membership from 74 nations and territories, MDRT members demonstrate exceptional product knowledge, strict ethical conduct and outstanding client service. Regarded as business and community leaders, membership in MDRT is recognized internationally as the standard of sales excellence in the life insurance and financial services business.

About Michael E. Gray, Jr.

Michael has 18+ years of life and disability insurance experience and is a licensed life and health agent in all 50 states and the District of Colombia. Since graduating from the University of West Florida with a Bachelor’s Degree in Economics in 1993, he has devoted his entire career to the insurance and financial services profession with specific emphasis on life and disability insurance. Over the years, Michael has assisted thousands of individuals and businesses on a nationwide basis.

In addition to MDRT, Michael is a member of the National Association of Insurance and Financial Advisors (FL) and the Better Business Bureau of Northwest Florida, Inc.

Michael has a beautiful wife Susan and they have 5 children: Elizabeth, Katelynn, Ryan, Emmilee, and Hannah.

About MEG Financial

MEG Financial, Inc. is a Florida based corporation that provides insurance and financial services consulting to individuals and businesses in all 50 states and the District of Colombia. Primary areas of expertise include term life insurance, universal life insurance, in-force policy review, insuring tough health risks, business life insurance including key man insurance, business succession planning, disability income insurance and estate planning. MEG’s customer centered approach allows for optimum solutions at the absolute best value. This is wholly embodied in MEG Financial’s tag line “True Direction for Life.”

MEG Financial, Inc. Renews Accreditation from Better Business Bureau and Maintains A+ Rating

MEG Financial, a nationwide boutique life and disability insurance brokerage company, announces that it has once again exceeded the Standards for Trust required for Accreditation by the Better Business Bureau. MEG Financial has been a BBB Accredited Business since 2005 and maintains the BBB’s highest possible rating, A+.

MEG Financial Founder and CEO, Michael Gray, Jr. states, “We are proud to be recognized again by the Better Business Bureau. Being Accredited by the BBB, reaffirms our unwavering commitment to delivering the best results to our customers and clients with the highest level of integrity.”

For the last 18 years, MEG Financial has strived to instill trust in every aspect of business practices by focusing solely on the needs and objectives of its customer. This customer centered approach goes hand in hand with the BBB’s Standards for Trust. The BBB Accreditation means that MEG Financial has adhered to build trust, advertise honestly, be transparent, honor promises, be responsible, embody integrity and safeguard privacy.

Gray adds, “our company tag line is ‘True Direction for Life’ and is reflective of our desire to provide the best solutions for our customers’ insurance and risk management requirements with the highest level of integrity.”

About the Better Business Bureau

The Better Business Bureau has a vision to establish an ethical marketplace where buyers and sellers can trust each other.The BBB ensures that high standards for trust are set and maintained and exists so consumers and businesses alike have an unbiased source to guide them on matters of trust. The BBB provides educational information and expert advice that is free of charge and easily accessible.

About MEG Financial

MEG Financial, Inc. is a Florida based corporation that provides life insurance and financial services consulting to individuals and businesses in 50 states. Representing over 80 of the nation’s highest rated and most respected life and disability insurance companies, MEG’s primary areas of expertise include term life insurance, universal life, disability income insurance, in-force policy review, insuring tough health issues, business insurance including business succession and key man life and disability insurance, as well as estate planning.

MEG Financial Unveils New Website Allowing Term Life Insurance Shoppers the Opportunity to Purchase A Policy Online Without Having to Complete a Medical Exam

LifeInsuranceNoMedical.com, Now Offers Instant Term Life Insurance Quotes With An Electronic Application That Can Be Approved Online Without A Medical Exam

MEG Financial, a nationwide leader in low cost term life insurance, announces the launching of a new website, lifeinsurancenomedical.com, that allows qualified customers the ability to purchase an affordable term insurance policy online without requiring a medical exam.

Lifeinsurancenomedical.com, utilizes an innovative electronic underwriting platform, developed exclusively by HSBC, to screen potential candidates and approve them for life insurance in a matter of minutes. HSBC’s “smart technology” offers life insurance shoppers a convenient alternative to the traditional method of buying life insurance. For many people, the idea of getting an affordable term life insurance policy without the hassles of a medical exam is extremely attractive.

HSBC’s innovative underwriting technology incorporates a series of detailed medical questions that are answered by the applicant directly online from the lifeinsurancenomedical.com website. Additionally, the company will complete a review of the applicant’s medical information bureau (MIB) record and will cross reference a pharmaceutical database to verify specific medications. The result is a thorough health assessment and if all conditions are satisfactory a policy is usually approved within minutes.

Not only is the entire process easy and efficient, rates are extremely competitive. In fact, in some instances such as well controlled diabetics and even some smokers, the cost of buying a policy through the lifeinsurancenomedical.com website is more attractive given the fact that there is no medical exam requirement or lengthy underwriting process.

About HSBC

Headquartered in London, HSBC is one of the largest banking and financial services organizations in the world. HSBC’s international network comprises around 8,000 offices in 88 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. HSBC provides a comprehensive range of financial services: personal financial services; commercial banking; corporate, investment banking and markets; private banking; and other activities.

Life policies sold through the lifeinsurancenomedical.com site are underwritten by Household Life Insurance Company and First Central National Life Insurance Company of New York and are indirect subsidiaries of HSBC North America Holdings Inc. The companies are rated as “A Excellent” (third highest rating of 16) by A. M. Best Company.

About MEG Financial

MEG Financial is a Florida based corporation that specializes in life and disability insurance for individuals and businesses. MEG Financial’s agents are licensed in all 50 states and the District of Columbia and represent over 80 of the nation’s highest rated and most respected life and disability insurance companies. MEG Financial’s primary areas of expertise include low cost term life insurance, insuring tough health issues, business insurance including key man life and disability insurance as well as estate planning.

Paula E. Pope with MEG Financial Receives Promotion to Chief Operating Officer

MEG Financial Announces Paula E. Pope Has Been Promoted to Chief Operating Officer

MEG Financial, a national specialty life and disability insurance brokerage agency, is proud to announce today that Paula E. Pope has been promoted to Chief Operating Officer. Paula has been with MEG Financial for the last 7 years and has over 25 years experience in working with small to mid-sized businesses with a specific emphasis on improving operations.

Over the last 7 years, Paula has taken on numerous responsibilities at MEG Financial including executive assistant to the CEO, head of licensing, underwriting manager, employee training director and office manager. Her contributions over the years have been significant and her focused efforts and innovative ideas have been key to the rapid growth of MEG Financial.

Michael E. Gray, Jr., MEG Financial’s Founder and Chief Executive Officer states, “Since joining MEG, Paula has dedicated herself to making us a better company. She is a tremendous asset and her promotion to COO is well deserved.”

In addition to the many roles she has taken on at MEG Financial, in 2009, Paula completed the requirements and passed the Florida state insurance exam to become a licensed independent life insurance agent. While sales have not been a primary responsibility, she has helped many individuals and business owners secure life insurance to protect their families and businesses. The fact that she has her life insurance license and has made numerous sales gives her a unique perspective that only enhances her value as Chief Operating Officer.

Paula has been happily married for over 40 years to her husband Larry and they currently reside in Pensacola Florida.

About MEG Financial

MEG Financial is a national boutique life and disability insurance brokerage agency located in Pensacola Florida. MEG has been in business for 17 years and has helped thousands of individuals and businesses secure life and or disability insurance policies. MEG has agents licensed in all 50 states and the District of Columbia and represents over 80 of the nation’s top insurance companies. Areas of specialization include term life, individual disability insurance, key man insurance for businesses and finding affordable life insurance for individuals with medical issues.

Matthew Griggs With MEG Financial Achieves Membership In Million Dollar Round Table

Outstanding client service, ethics and professionalism have enabled Matthew Griggs with MEG Financial in Pensacola, FL to achieve membership in the prestigious Million Dollar Round Table— The Premier Association of Financial Professionals.®

Attaining membership in MDRT is a distinguishing career milestone. It requires adherence to a strict Code of Ethics, focus on providing top-notch client service and involvement in at least one other industry association.

MDRT is The Premier Association of Financial Professionals. Founded in 1927, MDRT is an international, independent association of more than 35,000 of the world’s best life insurance and financial services professionals. With membership from more than 74 nations and territories, MDRT members demonstrate exceptional professional knowledge, strict ethical conduct and outstanding client service. MDRT membership is recognized internationally as the standard of sales excellence in the life insurance and financial services business.

“Matthew has been with MEG Financial for 2 1/2 years and after his 2nd full year he has qualified for the prestigious Million Dollar Round Table. He is an outstanding asset to the MEG Financial team. He has come in with a sincere desire to help people and to succeed in his business and professional career. I fully expect that Matthew will continue his rapid rise in the insurance and financial services arena and will qualify for the MDRT annually,” states Michael E. Gray, Jr. President and CEO of MEG Financial.

Matthew has over 10 years of sales experience and has focused in the financial services industry for the last 3 years. He currently specializes in life and disability insurance working with business owners and executives. His areas of expertise include keyman insurance, individual disability insurance and estate planning. He graduated in 2008 with a Bachelors degree in Financial Accounting from the University of West Florida and also received his Associates Degree in Business Management from Pensacola State College.

MEG Financial is a Florida based corporation that is licensed in all 50 states and the District of Columbia. MEG has been in the life and disability business for almost two decades and qualifies annually for the MDRT. MEG is currently a member of National Association of Insurance and Financial Advisors (NAIFA) as well as a member of the Better Business Bureau.

You can reach Matthew Griggs personally at (877) 583-3955 or email at matthewg(at)megfinancial(dot)com.

Michael E. Gray, Jr. With MEG Financial Earns Membership In The Million Dollar Round Table For The Seventh Consecutive Year

Outstanding product knowledge and client service has enabled Michael Earle Gray, Jr. with MEG Financial, Inc. in Pensacola, FL to earn membership in the prestigious Million Dollar Round Table (MDRT) and the Court of the Table for the seventh consecutive year.

Achieving membership in MDRT is a distinguishing career milestone, attained only by those who have demonstrated exceptional professional knowledge, expertise and client service. The Round Table’s membership represents the top life insurance and financial service professionals worldwide.

MDRT, The Premier Association of Financial Professionals, is an international, independent association of more than 33,000, or less than 1 percent, of the world’s best life insurance and financial services professionals. With membership from 74 nations and territories, MDRT members demonstrate exceptional product knowledge, strict ethical conduct and outstanding client service. Regarded as business and community leaders, membership in MDRT is recognized internationally as the standard of sales excellence in the life insurance and financial services business.

Michael has 17 years of life and disability insurance experience and is a licensed resident life and health agent in Florida and licensed non-resident agent in 49 other states and the District of Colombia. Since graduating from the University of West Florida with a Bachelor’s Degree in Economics in 1993, he has devoted his entire career to the insurance and financial services profession with specific emphasis on life and disability insurance. Michael has assisted thousands of individuals and businesses on a nationwide basis.

MEG Financial, Inc. is a Florida based corporation that provides insurance and financial services consulting to individuals and businesses in 50 states and the District of Colombia. Primary areas of expertise include term life insurance, universal life insurance, in-force policy review, insuring tough health risk, business life insurance including key man insurance, business succession planning, disability income insurance and estate planning.

In addition to MDRT, Michael is a member of the National Association of Insurance and Financial Advisors (FL) and the Better Business Bureau of Northwest Florida, Inc.

Michael has a beautiful wife Susan and they have 5 children: Elizabeth, Katelyn, Ryan, Emmilee, and Hannah.

You can reach Michael E. Gray, Jr. personally at (877) 583-3955 or email michaelg(at)megfinancial(dot)com

MEG Financial Attains Exclusive Club Membership with Midland National Life Insurance Company

Michael E. Gray, Jr of MEG Financial Attains Exclusive Club Membership with Midland National Life Insurance Company

Sioux Falls, SDExceptional performance and professionalism have helped Michael E. Gray, Jr. of MEG Financial attain exclusive club membership status with Midland National Life Insurance Company.

Midland National club membership is a long-standing tradition reserved for the top representatives of Midland National Life Insurance Company. Membership means that the agent has met high standards of production, principle, persistency and performance. But most of all, it indicates that the agent is a professional dedicated to the client.

“Qualifying for club membership is a career highlight and distinguishes Michael as a stand out among fellow agents,” says Midland National President and COO Steve Palmitier, CLU.

Midland National Life Insurance Company has been in business since 1906. As a member of the Sammons Financial Group1, it shares resources and services with other Sammons Financial Group members to achieve optimal efficiency and growth. The Sammons Financial Group is not publicly traded. Its parent company – Sammons Enterprises Inc. of Dallas, Texas – is one of the nation’s largest privately held companies2. To learn more about Midland National, visit www.mnlife.com.

For the past 16 years, MEG Financial of Pensacola, Florida, a nationally recognized life and disability insurance and estate planning brokerage firm, has worked with business owners, professionals and high net worth individuals to secure life and disability insurance to provide financial security for their companies and or families. MEG’s specialty is finding the right policy at the right price and delivering the best results every time.

Michael is also a member of the Prestigious Million Dollar Round Table, MDRT, the Premier Association of Financial Professionals.

For more information or to receive a term life insurance free quote, contact Michael E. Gray, Jr. at (877) 583-3955 or by e-mail at michaelg@megfinancial.com.

1The Sammons Financial Group is comprised of Midland National Life Insurance Company, North American Company for Life and Health Insurance, Sammons Securities Company, and the Sammons Annuity Group.  The Sammons Annuity Group is a division of Midland National.

2Ranked No. 162 on Forbes 2009 List of America’s Largest Private Companies. The 2009 list includes 248 closely held corporations that had sales of more than $2 billion.

MEG Financial on Key Man Insurance: It May be More Valuable than You Think

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MEG Financial, a nationwide specialty life and disability insurance agency announces an overlooked opportunity for unwanted or needed keyman life insurance with the emerging “secondary market” for life insurance.

Pensacola, FL (Vocus) July 13, 2010

MEG Financial, a leading provider of key man insurance online explains the potential hidden value of unneeded key man life insurance policies.

Key man insurance, commonly referred to as key person insurance, is essentially life and/or disability insurance purchased by a business on the life of a key employee or business owner to offset financial losses that would arise from his or her death or extended illness. With many companies, this protection is essential to its continuation in the event that a key person is lost.

What happens when a key man insurance policy is no longer necessary?

While key man insurance is extremely valuable, circumstances constantly change and there are situations when key man insurance is no longer important. Common reasons why key man insurance policies are no longer required include changing company objectives, the key person retires or leaves the company for greener pastures, the business is sold, a loan is paid off or simply the original intent of the coverage has been fulfilled.

MEG Financial founder and CEO Michael E. Gray, Jr. states, “in the past, cases where key person coverage was acquired but was no longer needed, the only options for the business were to let the key man policy lapse or surrender the policy for its remaining cash value. If the company chose to lapse the policy, it became null and void with no value. If the policy was surrendered for its cash value, only a fraction of the policy’s face value is returned and in many cases the value received is far less than actual premiums paid into the policy.”

Life Settlements: The Secondary Market for Life Insurance

Over the last few years, a new opportunity has evolved, called a life settlement and has created a multi-billion dollar industry known as the life insurance “secondary market”. Similar to the secondary market for mortgages, the life settlement market provides an efficient system for evaluating unwanted life insurance policies so that they can be valued for the purpose of selling them to an investor at a fair market value. These investors are typically very large and recognized institutional funders and prominent investment banks. Consequently, billions of dollars are now being poured into the life settlement industry to purchase unwanted life insurance policies.

According to Gray, “for companies owning key man insurance policies that are no longer needed, a life settlement may present a unique opportunity to receive maximum policy value for a potentially unrecognized asset. Instead of lapsing for no value or surrendering the policy for its available cash, it can be appraised to determine its potential fair market value and may then be sold in the secondary market subject to certain conditions.” Bottom line, find out more about the potential for a life settlement before any key man insurance policy is lapsed or surrendered. “You may be very surprised to learn that your key man policy is more valuable than you think!”

What’s the Catch?

Obviously, not all life insurance policies have value in the secondary market. Life settlement providers, those that purchase unwanted life policies for the purposes of reselling them to institutional investors, will competitively bid on life insurance policies based on the age of the insured, their health status and the specifics of the actual life policy being sold. Since the policies are being purchased as investments and will be kept active until the death of the insured, age requirements are at minimum individuals over 65 with some degree of health history. Additionally, if the policy is term, it must be convertible to whole life or universal life.

About MEG Financial

MEG Financial, Inc. is a Florida based corporation that provides life insurance and financial services consulting to individuals and businesses in all 50 states and the District of Columbia and representing over 80 of the nation’s highest rated and most respected life and disability insurance companies. MEG’s primary areas of expertise include life insurance, life insurance settlements, insuring tough health issues, business insurance including business succession and key man life and disability insurance, as well as estate planning.

MEG Financial, a nationwide specialty life and disability insurance agency announces an overlooked opportunity for unwanted or needed keyman life insurance with the emerging “secondary market” for life insurance.

MEG Financial, Inc. Unveils New Corporate Website

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MEG Financial, a national boutique life and disability insurance agency announces upgrades to its corporate website to include free instant term life and disability insurance quotes.

Pensacola, FL (PRWEB) June 18, 2010- MEG Financial, a national life and disability insurance specialty agency announced today the launching of their new corporate website. The new site offers individuals the opportunity to receive free personalized life and disability insurance quotes from the convenience of their home or office.

“This is a great opportunity for anyone looking for life or disability insurance to obtain the competitive quotes from the country’s top insurance companies instantly from their personal computer” says MEG Financial founder and CEO Michael E. Gray, Jr. “Our focus is on results and our instant online quote database assures accurate and up to date rates.”

MEG Financial’s areas of expertise include all forms of life insurance including term life insurance, whole life insurance, universal life, and equity indexed universal life insurance as well as disability income insurance for professionals and executives. Additionally, MEG specializes in key man insurance, business life and disability insurance and in assisting individuals with serious medical conditions such as diabetes, prostate cancer, sleep apnea and heart disease find competitively priced life insurance.

Over the past 16 plus years, MEG Financial has assisted thousands of individuals and businesses find and secure the absolute most competitive life and disability insurance. Licensed in all 50 states and the District of Columbia, MEG has written over $2 billion of in-force life and disability insurance. Representing over 80 of the nation’s top life and disability insurance companies, MEG Financial truly offers an independent advantage.

Gray goes on to say, “whether you are just shopping for comparison life insurance rates or are ready to buy a policy today, having objective and unbiased information goes a long way to helping you make the best policy choice. With the ability to get quotes instantly at www.megfinancial.com as well as the option to speak with a licensed professional agent, you have everything you need to make the life or disability insurance buying process pain free and guarantee the best results.”

Contact:

MEG Financial
Michael E. Gray, Founder, CEO and Independent Insurance Agent
196 East Nine Mile Road, Suite D
Pensacola, Fl 32534
Toll Free (877) 583-3955
www.megfinancial.com
comments@megfinancial.com
CA 0C39049

Dayspa article, “Money Matter”

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Money Matter by Chelan David

Expect the Unexpected

Protecting the continuity of your business means preparing for the worst .

Most spa owners don’t incorporate death into their business plans, nor do they plan on losing key personnel. But in the event that the unthinkable happens, it’s important to have a safety net in place.

Key-person insurance and buy-sell agreements are two safeguards to consider. They help ensure stability in the event that an integral employee or partner is lost.

Covering Key Employees

It’s a common refrain that the most valuable assets of a business are its workers. Yet while few spa owners
would throw caution to the wind by neglecting to insure their physical assets, many opt not to cover their most critical employees. However, the loss of certain staff members can be devastating to a day spa: Sales may languish; morale can deteriorate; credit can be hard to come by; and money must be reallocated toward finding a replacement.

Key-person insurance is designed to protect a business by minimizing disruption to its cash flow in the case of an untimely death. In essence, it’s a life-insurance contract on a vital employee. The employer pays the premiums and becomes the policy’s beneficiary upon the insured’s death—if such an event occurs. The benefits are received tax-free and can be used at the employer’s discretion.

“The loss of a vital worker is a traumatic event—emotionally and financially,” says Karen Susac, director of advanced markets at Symetra Financial (symetra.com). “Businesses need insurance to weather the financial storm that this kind of death can bring. It guarantees that the company has funds when they’re needed, and that the process of obtaining them is efficient and cost-effective.”

Among other things, the settlement can be used to cover the loss of sales or revenue generated by the employee and fund a search for a suitable replacement. “Keyperson insurance can mean the difference between closing the doors and having the cash flow necessary to continue operations while searching for someone new to take on that same role,” says Michael E. Gray, Jr., president of MEG Financial (keyperson
insurance.com).

Casting the Safety Net

When designating a key employee to insure, the most important question to ask is: Will the loss of this person impact revenue?

Although owners or partners are typically identified as critical employees, key-person insurance can cover any worker who’s vital to a day spa’s success. Some employees represent a business to its core and have established deep relationships with customers and vendors. Others may perform an essential task that would be hard for a new hire to immediately replicate. (Think about it: What would happen to your business in the short term if your most popular massage therapist were suddenly no longer able to perform her duties?)

“If there’s someone in the company who’s vital to its success, then she should be covered,” Gray says. “For example, a salesperson responsible for a large percentage of revenue needs to be insured.”

Another important consideration when obtaining key-person insurance is deciding the amount the policy should cover. There’s no magic formula for determining the value of an important employee. However, anticipated revenue losses, replacement costs and training issues factor into the equation. Some questions to ask include:

  • Will the loss of the employee correlate with a reduction of clientele?
  • How much will it cost to search for and hire a replacement?
  • How long will it take for the replacement to become as competent as the previous employee?
  • How many mistakes and how much lost business will occur during the training period?

Ultimately, a spa’s owner or management team needs to make the appropriate determination about an employee’s value. However, Susac provides a reference point from which you can work. “A good rule of thumb is 5 to 10 times her annual compensation,” she says.

Whomever you designate, it’s important to provide evidence of the value she brings to the organization—
and the insurance company underwriting the risk will need documentation. When applying for coverage, it’s helpful to include a letter summarizing the insured’s role in your business, her compensation and the basis of the amount for which you’re applying. Recent individual tax returns and financial statements are also useful in verifying income and the value of a business.

Gray’s advice to those interested in obtaining a key-person insurance policy? “Use a professional with experience. Shop around, but don’t buy based on price alone,” he says. “You can likely bring on a recognizable insurer with a stellar financial rating without paying significantly more.”

A Seamless Transistion

Key-person insurance can help bridge the financial gap if something happens to a spa employee who brings in a good amount of business, no matter her title. But when the worker in question is higher management or above, there are larger legal issues that must be addressed.

If an owner or partner passes away, a buy-sell agreement helps ensure the seamless transfer of ownership from the deceased to a designated titleholder. This arrangement, which should be set up early in the
life of the business or relationship, is a document between owners or partners that obligates a buyer
and seller once the relationship dissolves. (Death is one of the most common reasons why business partnerships end.) It also determines the price of the transaction that’s going to occur as ownership
is transferred. Overall, the buy-sell agreement is important because it establishes continuity and
determines the value of a business while minimizing distractions. “It’s designed to resolve potential
conflict between multiple parties interested in ownership and to assure a smooth transition,” Gray says.

There are several methods to ascertain the value of a buy-sell agreement. One option is for a third party, such as an accountant or a financial firm, to perform an appraisal of a spa and its assets. Another possibility is to identify the sell price by using a formula based on percentage of sales or revenue. Oftentimes, the methodology is part of an ongoing moving target; both parties will agree on a price that’s good for 12 months, and then revisit the agreement. Reviewing valuations from other comparable facilities in your area might provide additional insight, and that information should be a matter of public record.

When implementing a buy-sell agreement, it’s important to secure the proper funding, which you can typically do through a life-insurance contract. “To fund the obligation, each owner purchases life insurance. This assures that cash will be available exactly when it’s required to complete the sale,” Susac says. “It’s vital that the insurance is structured correctly given the type of buy-sell agreement you’re planning to create. Work with an agent who understands business insurance.”

Hand It Over

The most common buy-sell approaches include key-person buyout arrangements, entity purchases and cross-purchase agreements, Susac says.

For a sole proprietorship, a keyperson buyout is the only form of business continuation arrangement
that works. Under this setup, the owner and key person enter into an agreement wherein the owner’s estate is obligated to sell the business and the designated person is required to buy it upon the death of the owner.

Partnerships, S and C corporations, and limited liability companies (LLCs) with more than one member have several options. They can choose to set up a business continuation plan as a cross-purchase or an entity purchase. With a cross-purchase arrangement, a group of owners agrees that it will buy a deceased partner’s interest in the business for a predetermined price—if such a situation should arise. Each partner in the group then purchases a policy on the other owners’ lives for the agreed-upon amount. An entity purchase is a similar situation, but one in which the business would be the buyer of the policy.

The information and instructions that should be included with the buysell agreement will vary depending on the type you select. However, there are common elements. Essential components include the method used to value the business, terms of purchase, a detailed process for the transfer of ownership and the defining events that trigger the agreement, such as an owner’s death, disability or other succession criteria.

It’s important to review a buysell agreement to make sure that it meets the needs of the owner as well as those of the business. Other individuals who should always be involved in the process include an attorney and an accountant. Also, it can be helpful to employ a business valuation firm and an independent insurance agent to facilitate the arrangement.

Hopefully, none of the above options will be anything you’ll need to pursue. But as we’ve seen in the
economy over the past year or so, it never hurts to be well prepared.

Chelan David is a Seattle-based freelance writer.