Retirement and Other Insurance Concepts
What distinguishes key person insurance from a buy-sell arrangement?
Answer and explanation
Answer: D. Key person coverage compensates the business for the economic loss caused by the death of someone important to it, while a buy-sell arrangement supplies the money to buy out a deceased owner's interest under an agreement. Both are typically individual policies and either may be term or permanent.Source: Pearson VUE — Georgia Insurance Examination Content Outlines #121102 — Outline page S2, Key person compared with buy-sell
More retirement and other insurance concepts questions
- A wife applies for and owns a policy on her husband's life, naming their child as beneficiary. What is this arrangement called?
- After a life settlement closes, who owns the policy and who is responsible for the premiums?
- Are individual life insurance premium payments tax-deductible for personal income tax purposes?
- Four equal partners fund a cross-purchase buy-sell agreement with individual life policies. How many policies are required?
- How are contributions and qualified distributions structured for a Roth IRA?
- How are premium payments and death benefits typically split between an employer and employee in an economic benefit split-dollar arrangement?
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