GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

How often this word is used
 
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50% - Moderately

Entity-Purchase Agreement


Synonyms:business partner protection, business protection, equity purchase insurance, partner insurance
Filed Under: financial-banking, insurance, investments
Tags: banking, insurance, investment
 

Definition of entity-purchase agreement

entity-purchase agreement
1. A financial plan used by businesses with more than one owner where the company takes out a life insurance policy for each owner equalling the owner's stake in the business. If one of the owners dies, an entity-purchase agreement guarantees that the company will continue to run, while allowing the surviving owners to buy out the deceased owner's share of the business and evade any out-of-pocket expenses related to the deceased owner's passing.

Related Terms and Acronyms:

  • business continuation insurance   Insurance that provides coverage in the event that someone integral to the operation of a business dies or becomes disabled.
  • business life insurance   Life insurance that provides coverage in the event that a person key to the operation of a business dies.
  • insurable interest   Something of sufficient worth and benefit that an individual or entity would have reason to insure against its lost.
  • life insurance   An arrangement where an insurer agrees to pay a benefit to one or more beneficiaries in the event of the policyholder's death.
      ➥  CanEquity offers life insurance.
  • proprietor   The owner of a business or property.
  • single interest insurance   Insurance that covers a single party when more than one party has a stake in a property.

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