Entity Plan
Updated: 09 June 2023
What Does Entity Plan Mean?
An entity plan is business succession plan for companies with more than one owner. It involves the surviving partners buying the shares of the deceased partner. An entity plan is only enforceable if all partners have agreed to this in contract before it is acted upon.
Insuranceopedia Explains Entity Plan
Succession planning is usually undertaken by business partners even before the company is launched to ensure that the transition is smooth should one of the co-owners die.
Under an entity plan, the company buys the shares from the estate of the deceased. These shares are paid from the proceeds of a life insurance policy the business has bought specifically to handle this event.
Related Definitions
Related Terms
Related Articles
Top Commercial Insurance Feeds to Follow on Twitter
6 Types of Insurance All Businesses Should Have
Guidance for Nurses: Five Essential HIPAA Compliance Tips
Insuring Your Financial Future: the Crucial Role of Accounting in Insurance
The Future of Insurtech: How Technology is Transforming the Insurance Industry
Inside the Details of Auto Transport Insurance: An Expert Interview
Related Reading
Is Life Insurance Taxable?
What is a Participating Life Insurance Policy?
Limited Pay Life Policy
Indexed Universal Life Insurance
How Much Is a $100,000 Life Insurance Policy?
Which Type of Life Insurance Policy Generates Immediate Cash Value?