Entity Purchase Buy-Sell Submission Guidelines

Take advantage of complimentary, administrative services from Principal by making sure your business is submitted to our Business Market Administration (BMA) department.

Guidelines

1. Complete life insurance applications and accompanying life insurance illustrations, per NAIC regulations.
   • The employer (or a trust on behalf of employer) should be the policy owner and beneficiary.
   • Sex distinct rates should apply.
   • To speed underwriting, submit the following:
     • A brief cover note to identify three things: (1) Fair market value (FMV) of business and how this was determined, (2) the percentage of business ownership per proposed insured, and (3) whether a Principal National or Principal Life application is being submitted for ALL individuals under the buy sell plan, and if NOT, an explanation why.
     • Copy of business valuation or buy sell agreement (if available).
   • To obtain life insurance applications, visit the Create Application Packet page in Virtual Supply, or Principal Advisor Network offices may use Life E-App (for Term and Universal Life products only).
      
2. If corporate-owned policy, have authorized officer other than proposed client sign as policy owner¹.
   • For variable life insurance, submit documents identified in required Customer Identity Verification Form (MM2580)

If trust-owned policy, submit Trust Certification and Indemnification form RF 971.

3. Complete Business Case Submission Checklist (DD849R).
    
4. Have the customer complete a buy-sell agreement. You may refer to these sample agreements:
   • C corporation Entity Purchase Agreement (BB10992)
   • LLC taxed as Partnership Entity Purchase Agreement (BB10989)
   • Corporate Section 303 Stock Redemption Agreement (BB10987)
      
5. Prepare a cover letter/memo if there are any special instructions or requests.
    
6. Refer to the information below to submit above items.

Important Information

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