Disability Buy-Out (DBO) insurance funds a buy-sell agreement to buy out a totally disabled business owner. This coverage maximizes the financial return when a business is transferred, while minimizing tax liability. With a DBO insurance policy in place, the remaining owners or key person can continue the business without:

  • Using business revenue
  • Obtaining loans
  • Selling shares of the business for capital

Contract Details

  • Benefit Period – Can choose buyout over time (5 years) or lump sum
  • Elimination Period – Typically a 365 Day minimum
  • Definition of Disability
    •  Own-Occupation & Not Working – Benefit pays out if you are unable to perform the duties of your occupation and not working in any other field.
      Common Rider
    • Future Increase Option or Guaranteed Insurability Option – (AKA – Benefit Update) – Allows the insured to increase the monthly benefit in the future without the need to show proof of medical insurability, but will need to show proof of financial insurability to justify the increase.