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Business Management /Chapter 10 Uses Of Life Insurance Quiz

Chapter 10 Uses Of Life Insurance Quiz

Business Management5 CardsCreated about 2 months ago

This deck covers key concepts related to the uses of life insurance, including buy-sell agreements, key employee policies, and needs analysis.

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Two partners own equal shares in a business worth a total of 1M. If they both commit to the purchase of a life insurance policy that will fund a buy-sell agreement, which of the following is true?

Each partner owns a $500,000 policy on their partner's life.
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Key Terms

Term
Definition
Two partners own equal shares in a business worth a total of 1M. If they both commit to the purchase of a life insurance policy that will fund a buy-sell agreement, which of the following is true?
Each partner owns a $500,000 policy on their partner's life.
C is a key employee at ABC Incorporated. If a key employee life policy is purchased on her life, which of these statements would be true?
ABC is the policyowner, C is the insured, and ABC is the beneficiary.
When an individual is planning to protect his family with life insurance, one method of doing so is called needs analysis. What exactly does needs analysis involve?
Establishes the needs of the individual and his dependents.
What is considered a valid reason for a small business to insure the lives of its major shareholders?
Fund a buy-sell agreement in the event of death of a major shareholder in a business.
Which of these is NOT relevant when determining the amount of personal life insurance needed?
Local unemployment rate.
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Chapter 10 Uses Of Life Insurance Quiz
TermDefinition
Two partners own equal shares in a business worth a total of 1M. If they both commit to the purchase of a life insurance policy that will fund a buy-sell agreement, which of the following is true?
Each partner owns a $500,000 policy on their partner's life.
C is a key employee at ABC Incorporated. If a key employee life policy is purchased on her life, which of these statements would be true?
ABC is the policyowner, C is the insured, and ABC is the beneficiary.
When an individual is planning to protect his family with life insurance, one method of doing so is called needs analysis. What exactly does needs analysis involve?
Establishes the needs of the individual and his dependents.
What is considered a valid reason for a small business to insure the lives of its major shareholders?
Fund a buy-sell agreement in the event of death of a major shareholder in a business.
Which of these is NOT relevant when determining the amount of personal life insurance needed?
Local unemployment rate.