Buy-sell agreements are foundational for business owners, but disability funding is often overlooked or dismissed due to cost. The risk, however, is real and often more likely than death during a partner’s working years. The goal isn’t perfection...it’s creating a plan that balances protection, cost, and practicality.
When a full disability buy-sell solution feels out of reach, advisors don’t have to walk away from the conversation. Thoughtful design adjustments - like extending the trigger period or partially funding the obligation - can significantly reduce premiums while still protecting the business. In one case, refining the structure cut annual costs by more than half while preserving meaningful coverage and peace of mind.
[Blog Post] Lessons from Connelly v. United States on Funding Disability Risks
There are also times when a strategic pivot makes more sense. If clients resist a forced buyout structure or need more flexibility, a high-limit key person disability approach can address income continuity and liquidity needs while lowering costs. This allows the business to maintain stability, support the disabled partner, and create a path toward eventual equity repurchase without forcing an immediate decision.
The key is recognizing that the repurchase obligation doesn’t go away. Without a plan, a disability event can create a significant financial strain at the exact moment a business is already under pressure. Advisors who understand when to adjust the structure versus when to pivot solutions can better align coverage with client goals, budgets, and risk tolerance.
[Case Study] Buy-Sell Disability Policy for Three Business Partners
At its core, succession planning isn’t about fully funding every scenario - it’s about ensuring the business has a clear, intentional path forward when the unexpected happens.
This post was adapted from the published article as seen in Insurance News Net magazine written by Sean McNiff, VP of Business Development at Exceptional Risk Advisors. You can read the full article here.