Retirement and Other Insurance Concepts
How does an entity-purchase buy-sell plan differ from a cross-purchase buy-sell plan in a multi-owner corporation?
Answer and explanation
Answer: B. Under an entity (stock redemption) plan, the business entity owns one policy per owner, streamlining policy administration for multi-owner businesses.Source: NAIC Business Insurance Guide — PDF page 6, Entity Plan
More retirement and other insurance concepts questions
- A closely held corporation funds a buy-sell agreement so that the company itself buys a deceased shareholder's stock. What is this plan called?
- A company buys life insurance on its chief engineer to protect against the financial loss if she dies. Who is the owner, premium payer, and beneficiary?
- A corporation owns and pays for a policy on an executive's life and is also the beneficiary. When must the insurable interest exist?
- A fully insured worker dies leaving a spouse and a 10-year-old child. At what age will the surviving spouse's Social Security child-in-care benefit terminate if the child is not disabled?
- A fully insured worker dies. Which survivor is eligible for the Social Security lump-sum death payment?
- A planner totals a family's final expenses, mortgage balance, and income needs, then subtracts savings and Social Security benefits. Which method is being used?
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