Under a stock redemption plan, the corporation redeems the shares of the withdrawing stockholder. Retirement, death and disability tend to be the three most common withdrawal events found in buy-sell agreements, but corporations are not limited to those three and are free to mix and match as they see fit.

Stock redemption plans are easier to administer than cross-purchase plans because stock redemption plans require only one policy type per shareholder. Furthermore, the potential for unequal insurance costs due to individual health and age are evenly asorbed by the company.