Chapter 10 Flashcards
What is a Cross-Purchase Plan?
A plan where surviving owners purchase the deceased’s interest, often using life insurance funds from each principal on the lives of all other principals.
What is an Entity Plan?
An agreement where a business buys a deceased owner’s interest, increasing the interests of the surviving owners proportionately.
What is the Human Life Value Approach?
A method to determine an individual’s economic worth based on the sum of their future earnings devoted to their family.
What is Key Person Insurance?
Insurance that protects a business from financial loss due to the death or disability of a vital member with special skills or expertise.
What is the Needs Approach?
A method for determining insurance protection by analyzing a family’s or business’s needs if the insured dies, becomes disabled, or retires.
