XCEL Chapter 11

Three business partners individually agree to acquire the interest of a deceased partner and own life insurance on each of the other partners in the amount of his or her share of the business's buyout value. What is described here is

a cross-purchase buy-sell plan

Life insurance can be used in business in all of the following ways EXCEPT

as a profit sharing plan

Key person insurance is intended to

cover business losses due to the death of a key employee

Which of the following pieces of information is NOT gathered during the personal financial planning process?

An individual's civic organization memberships

Three individuals form a partnership with equal shares valued at $300,000. If they were persuaded to use an "entity" buy-sell plan funded with life insurance, how many policies and for what amounts would be purchased?

Three policies for $100,000 each

"Life insurance creates an immediate estate". This phrase means

when the insured dies, a death benefit is paid