Life Insurance Policies
Two business partners want the survivor to be able to buy out the deceased partner's interest. Which design serves that?
Answer and explanation
Answer: D. The money is needed at the first death, which is exactly when a joint life policy pays, making it an efficient way to fund a buy-sell agreement. Survivorship life pays too late, and insuring one partner alone leaves the other death unfunded.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, joint life uses
More life insurance policies questions
- What right does the conversion privilege in a convertible term policy confer?
- What stays level throughout the term of a level term life insurance policy?
- What unbundled components characterize a universal life insurance contract?
- When does a joint life (first-to-die) policy pay its death benefit?
- When does a survivorship life (second-to-die) policy pay its death benefit?
- Which client is level premium term suited to?
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