Kentucky Life Insurance State Practice Exam 2025 - Free Life Insurance Practice Questions and Study Guide

Question: 1 / 400

What is buy-sell insurance primarily used for?

To fund estate taxes

To ensure business continuity by funding the purchase of a deceased partner's shares

Buy-sell insurance is primarily utilized to ensure business continuity by funding the purchase of a deceased partner's shares. This arrangement is critical for businesses with multiple owners, as it provides a financial mechanism to smoothly transition ownership when one partner passes away. The death of a partner can create uncertainty and potential disruption in business operations; having a buy-sell policy in place ensures that the surviving partners can buy out the deceased's interest. This helps maintain stability within the company and protects both the business and the deceased partner’s heirs by facilitating a fair and predetermined value for the business shares. This arrangement can help avoid conflicts or financial strain on the remaining partners, ensuring that the business continues to operate effectively post-transition.

Get further explanation with Examzify DeepDiveBeta

To provide a retirement income

To pay for funeral expenses

Next Question

Report this question

Download Kentucky Life Insurance State Practice Exam PDF Study Guide
Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy