Health · Chapter 16 · Business & Special Uses
Disability Buy-Out Policy
Definition
Funds a disability buy-sell agreement — purchasing a disabled owner's share. Cross-purchase: partners buy policies on each other (n×(n−1) policies). Entity: the company owns one per owner. Distinctive features: lump-sum benefit option (buying an asset, not replacing income) and a very long elimination period — up to 2 years (to be sure the owner isn't coming back).
Easy to confuse with
These are what this term gets tested against — if you can't tell them apart cold, drill the contrast.
Related terms