A Buy/Sell Failure to Survive Case Study
Petersen International’s Failure to Survive product provides a simplified-issue death benefit on a term chassis to customers who need coverage quickly or who are not eligible or the right fit for traditional term insurance. Typical uses of the insurance are for third-party key person situations, to indemnify buy/sell agreements and other business contracts, divorce decrees as well as satisfying lender requirements for business loans. To provide further insight and understanding of the product, here is a buy/sell Failure to Survive case study:
A manufacturing company was in the process of addressing their succession business planning, seeking to acquire term life insurance policies on the four owners as a requirement of their corporate buy/sell agreement. The company sought out $2,500,000 on each owner, covering the current market value of their ownership in the business.
One of the owners, a 46-year-old male, went through informal underwriting with a number of domestic life carriers and was facing declines across the board due to an extensive history of substance abuse, a couple of DUI charges as well as a 30-day stint in an in-patient alcohol treatment program. Furthermore, the prospective client was currently undergoing an evaluation for depression and anxiety.
Not an easy case to say the least.
The advisor was familiar with our liberal product lines and underwriting flexibility and reached out to Petersen International for help.
We were able to provide the client with a Failure to Survive simplified-issue term policy covering the entire $2,500,000 need. The policy was rated for the drug and alcohol history, but was approved and issued quickly, allowing the client and his partners to properly address the insurance needs of their buy/sell agreement.
Don’t let insurance company declinations or underwriting timetables stand in the way of providing your clients with the insurances they require. Please give us a call at (800) 345-8816 to learn more about the Failure to Survive line of products including buy/sell coverage.