Disability Buy-out Insurance
Definition of "Disability buy-out insurance"
Buy-sell agreements found in partnerships, sole proprietorships, and close corporations. Either the business entity or the surviving members of the business agree to buy out the interest of a disabled member according to a predetermined formula funded through insurance. Disability buy-out insurance can be more important to a business than death buy-out insurance because the chances of becoming disabled are 7 to 10 times greater than death, depending on the age of the individual. The mechanisms available for the disability buy-out are the same as those found under business life and health insurance.
Popular Insurance Terms
Payment of premiums and benefits as they come due. In pension plans, known as the "pay as you go basis." The plan depends on new employees coming into the work force so that their ...
Independent agency supported by the insurance industry that tests a variety of materials, products, and devices, such as appliances and electrical equipment, to assure that they meet safety ...
Reductions in the value of property due to physical damage or destruction. ...
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Type of employee savings plan under which an employee may contribute up to a specified percentage of the salary on an after-tax basis and the employer matches the employee's contribution up ...
Risk management technique for identifying risks and taking steps to minimize losses. ...
Means of paying the cost of benefits of pension plan participants including retirement, death, and disability. ...
Limit allowed by law on employee salary reduction plans. Many pension plans, as well as the popular 401 (k) plan, allow employees to set aside pre-tax dollars in a company-sponsored ...
Type of insurance that provides a single aggregate limit of coverage within the insurance policy terms, thereby limiting the insurance company's liability for a risk transferred to it. The ...
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