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Survival Strategy

Disability could strike you at any moment-protect your business and your partners.

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This story appears in the March 2001 issue of Entrepreneur. Subscribe »

If you co-own your business, your partnership agreement probably includes a buy-sell provision to settle matters if one owner either wants out of the business or dies. Now you can buy insurance to fund the buy-sell process in the event of a disability.

Disability buy-sell insurance provides cash to purchase the insured's share of the business in the event of his or her total disability. Don't confuse this with disability income insurance, which replaces your income if you become disabled. "Disability buy-sell protects the business value, rather than the individual income of the business owners," explains Paul M. Gribbons, vice president of disability income marketing and strategic planning for MassMutual Financial Group in Springfield, Massachusetts. "It allows the healthy owner to buy the disabled owner's share of the business without using business profits or personal funds. The benefit for disabled owners is, they get the value of their businesses and the satisfaction of knowing that the companies they worked so hard to build won't be financially hurt because of their disability."

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