American College HS330 Exam - Topic 1 Question 13 Discussion

Actual exam question for American College's HS330 exam

Question #: 13
Topic #: 1

Generally all the following statements concerning life insurance arrangements for partnership buy-sell agreements are correct EXCEPT:

AWith a cross-purchase agreement each partner purchases life insurance on the life of each of the other partners.

BWith an entity-purchase agreement the formula used for determining the number of life insurance policies needed is N (number of partners) + 1.

CWith a cross-purchase agreement the individual partners are the applicants, owners, beneficiaries and premium-payers of the policies.

DWith an entity-purchase agreement the partnership strives to maintain face amounts of coverage equal to its obligations under the agreement.

Show Suggested Answer

Suggested Answer: B

by Howard at May 04, 2022, 03:55 AM

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Jeniffer

5 months ago

I thought there were more complexities in these agreements.

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Carylon

6 months ago

Yup, D sounds right to me!

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Casie

6 months ago

Wait, isn't the formula for entity-purchase just N?

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Madalyn

6 months ago

Totally agree, that's how it works!

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Berry

6 months ago

Cross-purchase means each partner buys for the others.

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Peter

6 months ago

I'm a bit confused by the different cardinality options. I'll need to review my notes on entity-relationship diagrams to make sure I understand the differences between 11, 1n, n:m, and m:n.

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Lisandra

6 months ago

I think I know the answer to this, but I want to double-check my understanding. Let me walk through the exhibit and the options again to be sure.

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Terry

6 months ago

I recall similar questions about disease management, and I wonder if the case management model is the one where healthcare is actively coordinated like this.

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