How to make buy-sell insurance work for you
The Insurance Portal periodically publishes short comparative tables on a particular type of life insurance product available on the Canadian market. This time we spotlight buy-sell insurance.
What is this product all about? Buy-sell insurance is designed for businesses with more than one owner.
Let’s say two executives have equal holdings in a business. This protection will let them buy out the other partner if that person dies or becomes disabled. The benefits paid out by the policy can be used to buy out the share of that partner and keep remaining management in place, ensuring the continuity of the firm.
Three insurers serve this market in Canada: Canada Life, Manulife and RBC Insurance. The minimum age requirement to purchase this product is 18. A business owner can buy it until age 55, but RBC sets the limit of age 60.
The three insurers differ over the maximum age for policy renewal. The limit at RBC Insurance is 64, versus 63 at Manulife, and 62 at Canada Life.
RBC offers the highest guarantee amount for this product, at $2 million under certain conditions. This limit may vary according to the business sector. Canada Life offers a maximum amount of $1 million, just as Manulife does for certain sectors.
Are you a life insurance advisor who wants to compare more characteristics? Our Product Finder tool is the perfect solution. You can compile ample information on over 400 products!