Life Insurance Basics
How does a cross-purchase buy-sell agreement use life insurance?
Answer and explanation
Answer: B. Under a cross-purchase each owner holds a policy on every other owner and uses the proceeds to buy that owner's share from the estate. An entity purchase, or stock redemption, has the business itself own the policies and make the purchase.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, business continuation
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