Imagine this: your business partner passes away unexpectedly. Overnight, you’re not just grieving, you’re also faced with running the company alongside their spouse, who now owns half the business but has no desire (or ability) to be involved.
Clients get nervous. Employees worry about their future. And you’re left scrambling to find the money to buy out the family’s share and that money isn’t readily available.
It’s the kind of scenario that unravels even the strongest companies. But with the right planning, it doesn’t have to. That’s where life insurance comes in. Life insurance isn’t just as a personal safety net, but can also be one of the most effective tools for business continuity.
At Summit Legacy, we like to think of it in terms of the ABCs:
A is for Agreements (as in Buy-Sell Agreements)
Every business partnership begins with optimism, but few last forever. A buy-sell agreement acts as a roadmap, spelling out what happens to an owner’s shares if they retire, exit, or pass away. However, a buy-sell agreement without a funding mechanism is not worth much more than the paper it’s written on.
Enter life insurance.
When backed by life insurance, these agreements create instant liquidity to fund a smooth transfer of ownership. Surviving partners aren’t forced to borrow at high interest or sell equity in desperation, and families aren’t left in limbo.
Case in Point: Two brothers ran a thriving construction company. When the older brother died suddenly, the buy-sell agreement they had funded with life insurance allowed the younger brother to purchase his sibling’s shares from the estate immediately. The transition was smooth, the family received fair value, and the business stayed strong.
B is for Business Protection (as in Key Person Coverage)
Every company has individuals whose knowledge, relationships, or leadership are central to its success. Losing one of them can cause ripple effects across operations, revenue, and morale.
Key person insurance provides stability in these moments. The payout gives the company breathing room to hire a qualified replacement, reassure lenders and clients, and keep the team focused on moving forward.
Case in Point: A small software firm lost its CTO, who was the architect of their core product, just weeks before a major release. Because the business had a $1 million key person policy in place, they were able to bring in an interim leader, keep staff from jumping ship, and reassure anxious investors. That coverage didn’t just replace income, it bought the time and trust the company needed to recover.
C is for Continuity (as in Growth, Succession & Sale)
As your business evolves, your planning must evolve with it. A policy that matched your needs five years ago may not fit today’s valuation, ownership structure, or goals.
Life insurance supports continuity in three critical ways:
Growth – Ensures coverage keeps pace as the business expands.
Succession – Equalizes inheritances among family members, preventing disputes.
Sale – Protects against gaps during multi-year earnouts or leadership transitions.
Case in Point: An HVAC business owner had three children. One was active in the company, but the other two were pursuing other careers. He used life insurance to ensure fairness. The child in the business inherited the company, while the other two received equal value through insurance proceeds. Instead of conflict, the plan left clarity, and the business stayed in the family without resentment..
The Protecting More Than a Business
Your business is more than a balance sheet. It represents years of effort, risk, and vision. For many owners, it’s a cornerstone of their legacy.
Life insurance helps ensure that legacy endures. By funding agreements, safeguarding against the loss of key people, and aligning protection with your long-term goals, it transforms uncertainty into stability.
The best time to put these protections in place is before you need them. Because when the unexpected happens, your family, employees, and community will look to the plan you set today
