An advanced markets team has come up with what may be a new way to protect business partners against mortality risk.
The team, part of John Hancock Life Insurance Company, Boston, a unit of Manulife Financial Corp., Toronto, says its cross-endorsement buy-sell plan combines split-dollar and buy-sell planning concepts.
When one business owner simply buys a life policy insuring the other owner’s life, the problem is that the owners do not get policies on their own lives, Hancock says.
If both owners survive until they retire, they could end up with tax problems, the company says.
Business owners who use the approach buy policies insuring their own lives, and that approach can help them fund a buyout of the business resulting from disability as well as death, the company says.
Hancock believes the approach is new to the market, the company says.
Hancock has introduced a new software module and marketing materials to explain and promote the concept.