Cross-Purchase Buy-Sell Structure
A cross-purchase agreement is a buy-sell structure where each business owner personally buys life insurance on the other owners, and uses the proceeds to purchase a deceased owner's share directly.
Unlike an entity redemption agreement, the business itself never owns the policies or is a party to the transaction — the purchase happens directly between the surviving owners and the deceased owner's estate.
Each owner insures the others personally. If one dies, the surviving owners use that insurance payout to buy the deceased owner's share themselves — the business isn't involved in the transaction at all.
Cross-purchase vs. entity redemption, and which fits your business.