Chapter 10

Three law partners form a Cross-Purchase Buy and Sell agreement. This agreement is funded with individual life insurance. How many total life policies are needed for this agreement?

6. Each partner owns, is the beneficiary of and pays the premiums for life insurance on the other partners equal to his or her share of the purchase price.

Company Z has a Cross Purchase Buy-Sell Agreement in place among its three founding partners. If the agreement is funded with individual life insurance, what would it require?

Each partner must own a policy on the other partners

Which of these factors does not influence an applicants need for life insurance? Self-maintenance expenses Number of dependents Future educational cost of the dependents Lifestyle of the applicant

Self-maintenance expenses

Which type of plan allows an employer to give money to an employee for buying a life insurance policy and also permits the employee to select the beneficiary?

Split-dollar plan

In a key employee life insurance policy, the third party owner can be all of the following except Applicant Owner Payor Insured

insured