Respuesta :
D) Each partner owns a $500,000 policy on their partner's life.
The amount of coverage is equivalent to each accomplice's share of the commercial enterprise. While one partner dies, the opposite companion gets the loss of life benefit from the lifestyle insurance of the deceased accomplice, which is then used to buy the deceased accomplice's ownership of the commercial enterprise.
The motive of key man or woman insurance is to mitigate the loss to the economic company due to the lack of existence of a key employee. All of the following beneficiaries get to maintain the dying advantages exempt from probate: partner.
In case you are a task supervisor, you might be wondering if you need to buy coverage. Assignment managers want to shop for coverage. At the least, all venture managers have to have prison responsibility coverage. In case you do not have felony duty coverage, a lawsuit can also need to take a big part of your income.
Your question is incomplete. Please find below the complete question.
Two partners own equal shares in a business worth a total of $1,000,000. 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?
A)Each partner owns a $1,000,000 policy on their own life
B)Each partner owns a $1,000,000 policy on their partner's life
C)Each partner owns a $500,000 policy on their own life
D)Each partner owns a $500,000 policy on their partner's life
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