And that obligation can be a real drag on the business if there aren't sufficient other assets to draw upon, because the obligation could force a liquidation of your share. You may think you have sufficient net worth that you don't need life insurance, but without it, your net worth could be destroyed. Because we're not talking worth here. We're talking liquidity. Your business has value, but only if it is kept intact.
Life insurance can provide the funds to accomplish that.
Your partners should insist upon it. So far we've been talking about how you can pass your partnership interest on to a son or daughter. Let's talk about your spouse first. But all your wealth is tied up in the business. Again, if all your wealth is tied up in the business, your spouse can disrupt the plan.