Ch 9: Business Insurance Flashcards
1
Q
What is a cross purchase plan?
A
When each partner. It’s insurance on the lives of the other partners. In this case, only two partners.
2
Q
What is entity purchase plan?
A
For more than two partners. Entity is the policy holder and beneficiary. The premiums paid for such business continuation insurance is not a tax deductible business expense
3
Q
What is key person insurance?
A
To cover the deceased business earnings due to the death of a key employees
4
Q
Key person insurance does not cover?
A
Overhead expenses
5
Q
What is a business overhead expense policy?
A
A policy sold to business owners to cover routine overhead and wages if a business owner becomes disabled.
