Partnership Life And Health Insurance
Protection to maintain the value of a business in case of death or disability of a partner. Upon the death or long-term disability of a partner, insurance can provide for the transfer of a deceased or disabled partner's interest to the surviving partner according to a predetermined formula. Funding can be achieved through either of two plans:
- Cross Purchase Plan each partner buys insurance on the lives of the other partners. The beneficiaries are the surviving partners who use the proceeds to buy out the deceased's interest. This plan can become complicated when there are more than two partners. For example, if there are four partners, partner A will buy insurance on the lives of partners B, C, and D. The procedure would be repeated with partners B, C, and D. Total policies would be 12.
- Entity Plan because of the number of policies required, the entity plan is most often used for buy-and-sell agreements by larger partnerships. The partnership owns, is beneficiary of, and pays the premiums on the life insurance of each partner. When one of the partners dies, the partnership as a whole purchases the deceased partner's interest. Premiums are not tax deductible as a business expense. If whole life insurance is used, the cash values are listed as assets on the balance sheet of the partnership and are available as collateral for loans.
Popular Insurance Terms
In a liability insurance policy, provision for the payment of the insured's expenses as stated in the policy in three areas above the policy limit of liability: legal fees resulting from ...
Number of bits a modem can receive or send per second. ...
Frequency of premium payment; for example annually, semiannually, quarterly, or monthly. ...
Federal legislation passed in 1988 (repealed November 23, 1989) that significantly increased the benefit amounts provided under medicare, both Part A and Part B, in the following manner: ...
Group appointed by President Nixon in 1971 to study workers compensation laws under the authorization of the occupational safety and health act (OSHA). It issued sweeping recommendations to ...
The term elevator collision insurance or elevator liability insurance is included in business liability insurance policies in order to cover potential damages suffered by the elevator or ...
Method of vesting under the employee retirement income security act of 1974 (ERISA) that requires an employee to have 10 years of service with an employer to be vested. An employee who ...
Documentation of loss required of a policyowner by an insurance company. For example, in the event of an insured's death, a death certificate (or copy) must be submitted to the company for ...
Coverage on jewelry and precious stones on an all risks basis at any location subject to exclusions of wear and tear, war, and nuclear disaster. Each item must be specifically listed in the ...
Have a question or comment?
We're here to help.