Which of the following statements pertaining to sole proprietor buy-sell plans is CORRECT?
A) In a sole proprietor buy-sell agreement, the sole proprietor is the owner of the policy.
B) Life insurance is an ideal medium for funding a buy-sell agreement because, for a reasonable premium, it makes money available when needed to activate the sale of the business.
C) Concerning disposition of the business after the proprietor's death, the only alternatives open to a sole proprietor are to dissolve the business or leave it to an heir as a bequest.
D) A buy-sell agreement for a sole proprietor can be drafted by the proprietor or the life insurance agent."
Ans: B) Life insurance is an ideal medium for funding a buy-sell agreement because, for a reasonable premium, it makes money available when needed to activate the sale of the business.
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