Succession Link’s Deal Terms Calculator was created so that users could see how the amount they receive for their practice changes with the structure of the transaction. Two core components make up the deal structure; the down payment, and the term years. Time is usually a major concern for Insurance Agents and Brokers engaged in the buying or selling of a practice, and the length of the deal agreed upon by both parties is a key determinant of the down payment. It is for this reason that the down payment estimation computed by the Deal Terms Calculator is a function of term years, which explains why users can change only the years and not the down payment.

Insurance Agents and Brokers involved in the exchange of a practice are faced with a tradeoff between time and price; sellers receive less money up front, but more in total as the amount of time to complete the full payment becomes longer; buyers pay less up front (a smaller down payment), but more in total as deal terms lengthen. While the tool is only meant to provide users with an idea of what to expect as terms vary, it’s important for Insurance Agents and Brokers to jointly consider the implications of both the term years and the down payment to a greater extent than the total expected payment. The largest price tag the Deal Terms Calculator will compute will be found at 10 years, the maximum allowed. The total can distract users from the ancillary implications that work in conjunction with a large dollar-value, such as a smaller down payment, smaller annual payments, an extended period of incomplete ownership for both parties, as well as many others.

This material has been prepared by Succession Link and in the belief that it is fair and not misleading. The information upon which this material is based on was obtained from sources believed to be reliable, but has not been independently verified; therefore, we do not guarantee the fore-mentioned practice. This is not an offer or solicitation of an offer to buy or sell any practice. Any opinion or estimates in value constitute our best judgment as of this data, and are subject to change without notice. Succession Link, has issued this material. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Succession Link.