Life Insurance Basics
Two partners agree that on the death of either, the survivor will buy the deceased's share. How does life insurance support that?
Answer and explanation
Answer: A. A buy-sell arrangement funded with life insurance puts cash in the survivor's hands exactly when the purchase obligation falls due. Valuation and transfer are settled by the agreement itself, which the insurance funds rather than replaces.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, buy-sell funding
More life insurance basics questions
- On what must a recommendation under Regulation 187 be based?
- Two clients need the same monthly survivor income. Why does the capital retention approach require a larger death benefit than capital liquidation?
- Under FCRA, if an insurer orders an investigative consumer report involving personal interviews regarding an applicant's character and lifestyle, when must written notice be sent to the applicant?
- What determines the effective date of coverage where no premium accompanies the application?
- What distinguishes an investigative consumer report from an ordinary consumer report?
- What do the two principal parts of a life insurance application contain?
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