Business owners need life insurance and a buy-sell agreement for several reasons:

Protecting the business from financial hardship: If a business owner were to pass away, it could lead to significant financial strain on the company, as the owner’s family may inherit the business and demand their share of the company’s value. Life insurance can provide the funds necessary to pay off any outstanding debts, buy out the deceased owner’s share of the business, and ensure the continued operation of the business.

Ensuring business continuity: If a business owner were to pass away, it could lead to instability within the company and jeopardize its ability to continue operating. A buy-sell agreement can ensure that the remaining owners have the right to buy out the deceased owner’s share of the business at a predetermined price, which can help to maintain stability and ensure the continued operation of the business.

Protecting the family’s financial security: Life insurance can provide a financial safety net for the owner’s family in case of their unexpected passing. The payout from the policy can help cover expenses such as funeral costs, outstanding debts, and the loss of the owner’s income.

Estate planning: Life insurance can also be used as a tool for estate planning, ensuring that the owner’s assets are distributed according to their wishes upon their passing. The payout from the policy can provide liquidity to the estate, which can help avoid the need to sell off business assets to cover expenses.

Overall, life insurance and a buy-sell agreement are essential tools for business owners to ensure the continuity and financial stability of their business, as well as protect their family’s financial security in case of their unexpected passing.