Partnership Insurance

What Does Partnership Insurance Mean?

Partnership insurance is a type of insurance typically bought by business partners. It often involves partners purchasing life insurance policies on each other and designating themselves as beneficiaries. In the event of one partner’s death, the surviving partner can use the life insurance payout to buy the deceased partner’s share of the business.

Insuranceopedia Explains Partnership Insurance

Partnership insurance protects businesses by preventing a third party from purchasing a deceased partner’s share. With this type of insurance, the surviving partner typically gains control of the business, ensuring that the ownership remains within the existing partnership.