Insurance Strategies for Businesses – SELF DIRECTED FINAL EXAM (CT 6000112012) (2023)

Katherine Clark signs a non-qualified deferred compensation agreement with Inco Corporation. To informally fund this agreement, Inco wants to purchase a life insurance policy. Who should be the owner and beneficiary of the policy?

What problem of the classic split-dollar arrangement is aggravated by the employer-pay-all approach?

All of the following are benefits of including waiver of premium when a life insurance policy is used in a non-qualified deferred compensation arrangement EXCEPT which one?

In key employee life insurance situations, who is the policy beneficiary?

What is the name for a buy-sell agreement between a partnership and the individual partners?

When is a cross-purchase agreement likely to have advantages over a stock redemption agreement?

Which of the following would not usually be considered a criterion in identifying a key employee?

In key employee life insurance situations, who is the policyowner?

Shareholders’ rights include which of the following?

Two stockholders enter into a cross-purchase agreement funded by life insurance. Which statement is true?

What shows the financial condition of a business over a period of time?

If there is no life insurance listed on a company’s balance sheet, all of the following are reasonable assumptions EXCEPT which one?

What is the maximum amount of stock that may be redeemed under Section 303?

All of the following are exempt transferees under the transfer-for-value rule EXCEPT which one?

Assume a limited partner contributes $10,000 to a partnership. There are two general partners. The partnership fails, and has liabilities of $100,000. What is the most the limited partner will lose?

In a partnership with three partners, how many life insurance policies are needed to fund a cross-purchase agreement?

In a partnership with three partners, how many life insurance policies are needed to fund an entity buyout plan?

Which type of disability buy-out agreement allows for a step-up in the basis of the remaining owner’s business interest?

Of the following types of life insurance, which is generally preferable when funding a buy-sell agreement?

What is the preferred way to fund a buy-sell agreement?

All of the following are methods for informally funding a non-qualified deferred compensation plan EXCEPT which one?

All of the following are valid uses of a split-dollar arrangement EXCEPT which one?

All of the following may be considered in determining the maximum amount of a Section 303 redemption EXCEPT which one?

Which of the following is NOT a loss that is usually associated with the death of a key employee?

Business assets must always equal the sum of which two items?