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Buy Sell Agreement Life (Insurance) Template for Indonesia

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Key Requirements PROMPT example:

Buy Sell Agreement Life (Insurance)

"I need a Buy Sell Agreement Life (Insurance) for my three-partner technology consulting firm in Jakarta, where each partner will have a $500,000 life insurance policy, and the agreement should include both death and permanent disability as trigger events for the mandatory purchase of shares."

Document background
The Buy Sell Agreement Life (Insurance) is a crucial business continuity planning tool in Indonesia, designed to protect both the business and its owners' interests. It becomes necessary when multiple stakeholders own a business and want to ensure smooth ownership transition while providing financial security for their heirs. The agreement specifies how business interests will be valued and transferred upon trigger events like death, funded through life insurance policies. Operating under Indonesian jurisdiction, particularly Law No. 40 of 2014 on Insurance and related OJK regulations, this agreement typically includes provisions for policy maintenance, premium payments, beneficiary designations, and proceeds distribution. It's especially relevant for family businesses, partnerships, and closely-held companies seeking to maintain business stability while ensuring fair compensation for departing owners' interests.
Suggested Sections

1. Parties: Identification of all parties to the agreement, including the business owners and their complete details

2. Background: Context of the agreement, including current ownership structure and purpose of the buy-sell arrangement

3. Definitions: Definitions of key terms used throughout the agreement, including technical insurance terms

4. Purchase Obligations: Core obligations of surviving owners to purchase and deceased/disabled owner's estate to sell

5. Insurance Obligations: Requirements for maintaining life insurance policies, including premium payments and beneficiary designations

6. Trigger Events: Events that activate the buy-sell provisions (death, disability, retirement, etc.)

7. Purchase Price: Method of determining the purchase price of shares/interest, including valuation mechanisms

8. Payment Terms: Structure and timing of payments, including use of insurance proceeds

9. Insurance Proceeds: Handling and distribution of insurance proceeds upon a trigger event

10. Tax Provisions: Allocation of tax responsibilities and treatment of insurance proceeds

11. Representations and Warranties: Standard declarations about authority, ownership, and accuracy of information

12. General Provisions: Standard contractual clauses including governing law, notices, amendments

Optional Sections

1. Disability Provisions: Detailed provisions for handling permanent disability, used when disability is included as a trigger event

2. Cross-Purchase Provisions: Specific provisions for cross-purchase arrangements, used when multiple owners are involved

3. Entity Purchase Provisions: Specific provisions for entity purchase arrangements, used when the company will purchase the shares

4. Retirement Provisions: Specific provisions for retirement-triggered purchases, included when retirement is a trigger event

5. Right of First Refusal: Provisions giving existing owners first right to purchase shares, used in more complex ownership structures

6. Dispute Resolution: Detailed arbitration or mediation procedures, included for higher-value or complex arrangements

7. Family Member Provisions: Special provisions regarding transfer to family members, used when family succession is a consideration

Suggested Schedules

1. Schedule A - Insurance Policy Details: Details of all insurance policies including policy numbers, amounts, and beneficiaries

2. Schedule B - Current Ownership Structure: Current ownership percentages and number of shares held by each owner

3. Schedule C - Valuation Method: Detailed methodology for business valuation, including any agreed-upon formulas

4. Schedule D - Contact Information: Complete contact details for all parties, insurers, and key advisors

5. Appendix 1 - Sample Calculations: Examples of how purchase price calculations would work in various scenarios

6. Appendix 2 - Required Notices: Forms and templates for required notices under the agreement

7. Appendix 3 - Insurance Certificates: Copies of current insurance certificates and beneficiary designations

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions












































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Relevant Industries

Financial Services

Insurance

Professional Services

Small and Medium Enterprises

Family Businesses

Manufacturing

Retail

Technology

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Relevant Teams

Legal

Finance

Risk Management

Compliance

Corporate Secretariat

Executive Leadership

Insurance

Tax

Treasury

Business Development

Relevant Roles

Business Owner

CEO

Managing Director

Partner

Chief Financial Officer

Legal Counsel

Insurance Broker

Risk Manager

Company Secretary

Financial Advisor

Corporate Lawyer

Estate Planner

Business Succession Planner

Tax Advisor

Compliance Officer

Industries








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