Disability buy-out insurance is designed to provide the funds needed to purchase a disabled owner or partner’s interest in the business if they become disabled. Disability buy-out insurance should be made part of any business continuation plan or business succession plan as it will assure that the disabled business owner receives a fair market value for his or her interest in the business. At the same
time, it will protect all business owners from the threat that a disability may impose on the company by allowing them to buy-out the disabled owner’s interest at an agreed upon price set forth in a buy-sell agreement.