Partnership Protection
Keep your business in the right hands if a partner dies
Partnership protection gives the surviving partners the funds to buy out a deceased partner’s share — so the business stays with the people who run it, and the partner’s family gets a fair, fast cash settlement.
Last reviewed by Debbie Cheevers, QFA, RPA · 30 June 2026
Who needs partnership protection?
Business partnerships
Two or more partners who’d struggle to fund a buy-out of a deceased partner’s share from their own pockets.
Co-directors & shareholders
Owner-managed companies where each shareholder’s family would expect fair value for their stake.
Firms with a buy-sell agreement
Anyone who has — or needs — a cross-option agreement to control what happens to a share on death.
What is partnership protection?
Cover that funds the buy-out
Partnership protection is a life insurance arrangement that pays a lump sum when a partner or co-owner dies.
That money lets the remaining owners buy the deceased partner’s share — without raising a loan, selling assets or taking on an outside investor.
Why it matters
Without it, a deceased partner’s share can pass to their family, who may want to sell, get involved, or hold out for a higher price.
The right cover, tied to a buy-sell agreement, gives everyone certainty: the business continues, and the family receives a fair cash sum.
What partnership protection gives you
Financial security
A ready lump sum to buy out a share, so the business keeps trading without scrambling for finance.
Tax efficiency
Set up correctly, the proceeds are normally free of Capital Gains Tax and Capital Acquisitions Tax.
Smooth succession
Ownership passes cleanly to the surviving partners, with no dispute over who controls the business.
Flexible cover
Sized to each owner’s stake, with the option to add serious-illness cover where it’s needed.
How partnership protection works
1. Review the agreement
We start with your partnership or shareholders’ agreement and put a cross-option (buy-sell) agreement in place.
2. Set up the policies
Each owner is insured for the value of their share, structured to suit the size of the partnership.
3. Pay premiums
Premiums are arranged so each owner contributes fairly for the cover in place.
4. Claim & buy-out
On a death, the lump sum funds the buy-out under the agreement — quickly and without dispute.
Two ways to structure the cover
| Life of Another | Own Life in Trust | |
|---|---|---|
| Best for | Smaller partnerships (two or three owners) | Larger groups of partners or shareholders |
| Who takes out the policy | Each partner insures the others directly | Each owner insures their own life, written in trust |
| How the payout is used | Goes to the surviving partners to buy the share | Held in trust and shared to fund the buy-out |
We’ll recommend the structure that fits your partnership and keeps the tax treatment right.
How it’s taxed in Ireland
The proceeds
Where the cover is set up properly — under the right own-life-in-trust or life-of-another arrangement with a cross-option agreement — the payout is normally free of both Capital Gains Tax and Capital Acquisitions Tax.
The premiums
Premiums are generally not tax-deductible. Getting the agreements and policy ownership right from the start is what protects the favourable treatment of the payout.
Tax treatment depends on your arrangements and on Revenue rules, which can change (correct as at 2026). This is general information, not tax advice — we’ll confirm how it applies before you commit.
Our four-step advice process
- 1
Free consultation
We get to know your business, the owners and how the shares are held.
- 2
Assess & agree
We value each share, recommend the structure and put the buy-sell agreement in place.
- 3
Recommend cover
We compare Ireland’s leading insurers and recommend the right policy for each owner.
- 4
Set up & review
We put the cover in place and review it as the business and its owners change.
Frequently asked questions
Can partnership protection be tailored to different partnership sizes?
Yes. ‘Life of Another’ policies work well for small partnerships, while ‘Own Life in Trust’ suits larger groups. There’s an arrangement to fit almost any business.
Does it cover temporary incapacity due to illness?
Standard policies don’t cover temporary incapacity. Adding critical-illness cover can provide a benefit on a serious illness, while income protection is the better fit for temporary absences.
What are the tax implications?
Premiums are generally not tax-deductible, but where the cover is set up correctly the payout is usually free of Capital Gains Tax and Capital Acquisitions Tax. We’ll make sure the structure protects that treatment.
How long should the policy run?
The term is usually set to match how long the owners expect to be in the business together. We’ll match it to your plans and review it as things change.
Is this the same as keyman insurance?
No. Keyman insurance protects the company against losing a key employee’s skills; partnership protection funds the buy-out of an owner’s share. Many businesses need both.
We work with Ireland’s leading life & pension companies
Ian was so helpful with the information I needed to put me on the right track — sent everything by email afterwards so it was easy to understand. Highly recommend.
Protect the business you’ve built together
Talk to a Greenway adviser about partnership protection and a buy-sell agreement that works. The first consultation is free and there’s no obligation.
Last reviewed by Debbie Cheevers, QFA, RPA, 30 June 2026. Information is general and not personalised financial advice.