Living Buy Out Partnership

Living Buy Out Partnership


Partners willing to plan for future funding need today. Desire to ensure smooth transition of business at retirement. Want to implement partnership agreement with buy-out provisions at retirement. Majority of partners under age 50. Partnership with funds available to invest.


Partnership overfunds a life insurance policy(ies) on partners to create cash values by retirement. Assign policy as collateral for bank loan. Partnership borrows to fund the buy-out. At death, insurance proceeds repay debt and excess is paid to partnership.

Comparative Analysis

Compare cost of life insurance to a taxable investment to fund the buy-out of a partner at retirement.


Cash values grow tax deferred. Borrowed funds received tax free. Loan interest may be deductible. Interest may be added to loan balance. Loan repayment deferred until death. Established lending relationship with Manulife Bank. Life insurance can fund buy-out on premature death.

  • Insurance Plan Canada Portal., 10-1200 Derry Road East Mississauga Ontario L5T 0B3
  • +1 877 495 2525
  • +1 419 833 8533
  • +1 905 670 5488