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Buy-Sell Agreement Funding Calculator
Short answer: What does the Buy-Sell Agreement Funding Calculator calculate?
The Buy-Sell Agreement Funding Calculator works out coverage needed per owner, number of policies and face amount per policy. Work out how much life insurance funds a buy-sell agreement and how many policies a cross-purchase or entity plan needs. You enter business value, number of equal owners, agreement type and existing coverage per owner, and results update as you type.
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See the coverage each owner needs — results update as you type.
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Put this calculator on your websiteWhat this calculator does
What the Buy-Sell Agreement Funding calculator works out
The Buy-Sell Agreement Funding Calculator is a free, embeddable calculator from CalcFunnel. Work out how much life insurance funds a buy-sell agreement and how many policies a cross-purchase or entity plan needs.
You enter 4 inputs: business value, number of equal owners, agreement type and existing coverage per owner.
It returns coverage needed per owner, number of policies, face amount per policy, total coverage, all policies and gap per owner vs. existing coverage.
Built for insurance agents and benefits advisors. Embedding it on your own website needs the Business plan (from $210/month, with a 14-day free trial), which unlocks the Insurance & Protection category.
Results it shows
- 01Coverage Needed per Owner
- 02Number of Policies
- 03Face Amount per Policy
- 04Total Coverage, All Policies
- 05Gap per Owner vs. Existing Coverage
The first figure — coverage needed per owner — is the headline result.
Inputs
What you can change
Every field visitors can adjust, straight from the calculator, with the same help text they see on the info icon. Each one starts with a sensible default, and the 5 results update as they type.
- Business Value
- The value the buy-sell agreement sets for the whole business, from a formula or recent appraisal.
- Number of Equal Owners
- How many owners share the business equally.
- Agreement Type
- Cross-purchase: each owner insures the others and buys their shares. Entity redemption: the business insures each owner and buys back the shares.Options: Cross-purchase · Entity redemption
- Existing Coverage per Owner
- Life insurance already in place to fund the buyout of each owner's share.
Definitions
Buy-Sell Agreement Funding terms, defined
The terms this calculator uses, in plain words. The same definitions appear inside the calculator for your visitors.
- Buy-sell agreementAcuerdo de compraventa
- A contract among business owners that sets who will buy a departing owner's share, at what price and how it will be paid when an owner dies, becomes disabled, retires or leaves. Funding it with life insurance means the cash is there when the triggering event happens.Un contrato entre los dueños de un negocio que establece quién comprará la parte de un dueño que se retira, a qué precio y cómo se pagará cuando un dueño fallezca, quede discapacitado, se jubile o se vaya. Financiarlo con un seguro de vida asegura que el efectivo esté disponible cuando ocurra el evento.
- Cross-purchase planPlan de compra cruzada
- Each owner buys a policy on every other owner and uses the payout to buy the deceased owner's share. With equal owners, each policy covers the deceased's share divided among the surviving owners. Surviving owners get a higher cost basis in the shares they buy, but the number of policies grows quickly: n × (n − 1).Cada dueño compra una póliza sobre cada uno de los demás dueños y usa el pago para comprar la parte del dueño fallecido. Con dueños en partes iguales, cada póliza cubre la parte del fallecido dividida entre los dueños sobrevivientes. Los sobrevivientes obtienen una base de costo más alta en las acciones que compran, pero el número de pólizas crece rápido: n × (n − 1).
- Entity redemption planPlan de rescate por la entidad
- The business owns one policy on each owner and buys back the deceased owner's share. It needs only one policy per owner and centralizes premium payments, but surviving owners do not get a basis increase, and C corporations may face other tax issues. The Supreme Court's 2024 Connelly decision held that corporate-owned life insurance proceeds can increase the company's value for estate tax purposes.El negocio es dueño de una póliza sobre cada dueño y recompra la parte del dueño fallecido. Solo necesita una póliza por dueño y centraliza el pago de las primas, pero los dueños sobrevivientes no obtienen un aumento de la base de costo, y las corporaciones C pueden enfrentar otros problemas fiscales. La decisión Connelly de la Corte Suprema de 2024 estableció que los pagos del seguro de vida propiedad de la corporación pueden aumentar el valor de la empresa para efectos del impuesto sobre la herencia.
- Business valuationValoración del negocio
- The price the agreement uses, set by a fixed amount, a formula such as a multiple of earnings, or an independent appraisal. Agreements should be reviewed every year or two so the value, and the insurance funding it, stays current as the business grows.El precio que usa el acuerdo, fijado como un monto fijo, una fórmula como un múltiplo de las ganancias o un avalúo independiente. Conviene revisar los acuerdos cada uno o dos años para que el valor, y el seguro que lo financia, se mantenga al día a medida que crece el negocio.
- Face amountMonto de la póliza
- The death benefit of each policy. In an equal three-owner cross-purchase plan for a $3,000,000 business, each owner's share is $1,000,000 and each of the six policies is $500,000.El beneficio por fallecimiento de cada póliza. En un plan de compra cruzada con tres dueños iguales de un negocio de $3,000,000, la parte de cada dueño es de $1,000,000 y cada una de las seis pólizas es de $500,000.
- Trusteed or LLC cross-purchaseCompra cruzada mediante fideicomiso o LLC
- A variation in which a trustee or a separate LLC holds one policy per owner on behalf of all owners, combining the tax advantages of a cross-purchase plan with fewer policies. It needs careful legal drafting.Una variante en la que un fiduciario o una LLC separada tiene una póliza por dueño en nombre de todos, combinando las ventajas fiscales de la compra cruzada con menos pólizas. Requiere una redacción legal cuidadosa.
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FAQ
Buy-Sell Agreement Funding calculator FAQs
Still stuck? Ask the team — we reply within one business day.
Q.01What does the Buy-Sell Agreement Funding Calculator calculate?
Work out how much life insurance funds a buy-sell agreement and how many policies a cross-purchase or entity plan needs. It returns coverage needed per owner, number of policies, face amount per policy, total coverage, all policies and gap per owner vs. existing coverage.
Q.02What information do I need to use the Buy-Sell Agreement Funding Calculator?
You enter 4 inputs: business value, number of equal owners, agreement type and existing coverage per owner. Every input starts with a sensible default, so you can change only what you know.
Q.03What does “Business Value” mean in the Buy-Sell Agreement Funding Calculator?
The value the buy-sell agreement sets for the whole business, from a formula or recent appraisal.
Q.04What does “Number of Equal Owners” mean in the Buy-Sell Agreement Funding Calculator?
How many owners share the business equally.
Q.05Is the Buy-Sell Agreement Funding Calculator free to use?
Yes — you can use it on this page for free, without an account. Embedding it on your own website needs the Business plan (from $210/month, with a 14-day free trial), which unlocks the Insurance & Protection category. Compare plans.
Q.06Can I embed the Buy-Sell Agreement Funding Calculator on my website?
Yes. Embed it inline, as a popup button, as a floating corner widget, from your own link or button, or share a direct link. It works on WordPress, Wix, Squarespace, Webflow, Shopify, GoHighLevel and plain HTML sites with one line of code — see embedding.
Q.07Can I change how the Buy-Sell Agreement Funding Calculator looks?
Yes. Choose from 12 themes, each in light and dark, then set your own brand colors and font. Ledger, Minimal, Compact come with every plan; the others unlock on Pro and Business.
Q.08Is the Buy-Sell Agreement Funding Calculator available in other languages?
Yes. It works in English, Spanish, Simplified Chinese, Korean, Vietnamese and Arabic, with a right-to-left layout in Arabic. Labels, tooltips, results and definitions are translated, visitors can switch language inside the calculator, and amounts stay in US dollars and US number format.
Q.09Can the calculator capture leads?
Yes. It can end with a lead form, a Get a Quote form, a Share panel or a button to any URL. Leads are saved with the inputs and results attached and can be forwarded to your CRM by webhook.
Q.10Are the Buy-Sell Agreement Funding results financial advice?
No. Estimates only. Assumes owners hold equal shares and that the business value you enter is the price set by the agreement. Real agreements may use a valuation formula or appraisal, cover disability and retirement as well as death, and have tax consequences that differ between cross-purchase and entity plans. Premiums are not estimated. Have the agreement drafted by an attorney and review funding with a licensed insurance professional and tax adviser.
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