Buy Sell Agreement
A business agreement that sets terms for transferring an owner's interest after events such as death, disability, or departure.
Why it matters
Life insurance is often used to fund a purchase, but the agreement and policy ownership must work together.
Where you may see it
Business agreement, valuation schedule, policy ownership records, beneficiary designations, and funding review.
What to verify
Trigger events, valuation method, buyer, owner and beneficiary of each policy, premium responsibility, and periodic review.
Do not confuse it with
Key person insurance, which protects the business from economic loss rather than directly funding an ownership transfer.
Read Buy Sell Agreement in context
Start with the exact sentence where the term appears, then read the definition, schedule, and any referenced rider together. The practical concern is this: Life insurance is often used to fund a purchase, but the agreement and policy ownership must work together. Locate the relevant records—business agreement, valuation schedule, policy ownership records, beneficiary designations, and funding review.—and compare them with the issued contract rather than a sales summary.
Before signing, changing coverage, or making a claim decision, record the points that control the result: Trigger events, valuation method, buyer, owner and beneficiary of each policy, premium responsibility, and periodic review. If another policy uses similar wording, do not assume it has the same effect.
Keep the dated page or form with your notes. If the definition changes the benefit, premium, ownership rights, or a deadline, ask the issuing insurer for a written explanation tied to the policy number.
Reliable places to check
- Your issued policy and application copy.
- NAIC consumer life insurance resources.
- Your state insurance department for licensing and consumer help.