Disability & Long-Term CareQuestion 90 of 716
Two partners in a business each own 50 percent. Which type of insurance is designed to fund the buy-sell agreement if one partner becomes permanently disabled?
a.Group long-term disability
b.Workers' compensation
c.Business overhead expense disability
d.Disability buy-out insurance
Explanation
Disability buy-out insurance provides the lump sum needed for the active partner or the business to purchase the disabled partner's share under a buy-sell agreement. BOE covers business expenses, not the purchase price of a partner's interest.
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Reviewed by John Zihao Zhang — California-Licensed Life Insurance Agent (CA Dept. of Insurance License #4396095 — verify)