Cross-Over Agreement Insurance

A cross-over agreement is a specific type of buy-sell agreement typically used in partnerships where each partner has life insurance policies on the other. If one partner passes away, the surviving partner uses the insurance proceeds to buy the deceased partner’s share.

Simplicity

This agreement is straightforward and allows each partner to maintain control over their shares without involving outside parties.

Liquidity for Purchase

The life insurance proceeds provide the necessary funds to purchase the deceased partner’s interest, ensuring the business remains stable.

Fairness in Valuation

Ensures that the value of each partner's share is agreed upon in advance, reducing potential conflicts.