MTHEL131 Lecture Notes - Life Insurance, Reinsurance, Swiss Re
7 Nov 2013
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Key person insurance, where a company insures one or more key persons. Company run by jane (sales/marketing) and sally (production/finance). If one of them dies, there will be losses. So they get the company to insure them both for. States that survivor must purchase shares of deceased"s estate. Jane would take out policy on the life of sally (jane= beneficiary). Sally would take out policy on the life of jane (sally= beneficiary). Allows the second partner to purchase the shares of the disabled partner. The disgruntled partner (who wants to be the sole owner of the company) would make the first move . They give writing notice stating: on this date, i give notice of intent to purchase your shares for . Once notice is given, within 30 days, there will only be one owner of the company. Or buy the disgruntled party"s shares? (same price)
