Life · Chapter 10 · Business Continuation
Entity Buy-Sell Plan
Definition
The BUSINESS ITSELF agrees to buy the deceased owner's interest. The business purchases, owns, pays for, and is beneficiary of ONE policy per owner — 3 partners = 3 policies. Proceeds buy the deceased's share, proportionately increasing the survivors' interests.
Exam tip
Count the policies: entity plan = n policies (one per owner). Simpler when there are MANY owners.
Easy to confuse with
These are what this term gets tested against — if you can't tell them apart cold, drill the contrast.
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