Ace the Florida Life & Health Insurance Test 2025 – Dive In and Secure Your Success!

Question: 1 / 400

What is considered a valid reason for small businesses to insure the lives of its major shareholders?

To cover operational costs

To fund a buy-sell agreement

Small businesses may insure the lives of its major shareholders in order to fund a buy-sell agreement. This agreement provides for the transfer of the shares of a deceased shareholder to the surviving shareholders. This can ensure the continuity of the business and provide financial stability during a time of transition. Options A, C, and D do not directly relate to insuring the lives of major shareholders and therefore are not considered valid reasons in this context. Insuring for operational costs, paying off business debts, and investing in stock markets are all important considerations for a small business, but they are not a direct reason for insuring the lives of major shareholders.

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To pay off business debts

To invest in stock markets

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