Understanding Buy Out Agreements

Scott Nelson-Archer

Business Buyout Coverage is one of several types of disability insurance. It's fairly common and makes good business sense for a medical practice with multiple partners to have an agreement in place to help insure the survival of the practice in the event that one of the partners dies. These buy-out agreements, where a spouse or heir is compensated for the share he or she has suddenly inherited are funded with life insurance. The prospect of a disabling injury or illness to a partner is addressed far less frequently by medical practices despite the fact that it is far more common for a physician to become disabled than die during his working years.

When an unforeseen disability occurs to one of the partners, there are suddenly three conflicting set of needs – the remaining partners point of view, the disabled partners concerns, and the survival of the practice. It is very important that something is in place ahead of time to govern the exit of a disabled partner in an equitable way that leaves both the disabled and remaining partner(s) financially secure. With emotions running high, it is very difficult to meet all these concerns amicably without a disability buy-out agreement and the buy-out coverage to fund it.

with Gary Baird
  Business Overhead Coverage

This often overlooked protection helps protect partnerships by offering a monthly benefit to pay regular reoccurring bills in the case of a disability.

with Ryan Poindexter
  Disability Buyout Coverage

Long-term disabilities can have a major financial impact on practices with multiple partners. Buyout coverage offers financial protection to all affected.

M.D. Disability Insurance Services is owned by M.D. Financial Services, Inc.