Which of the Following Is True Regarding Buyout Insurance

question 32

Multiple Choice

Which of the following is true regarding buyout insurance?

• A) It is usually provided as a stand-alone policy.
• B) It is only applicable for large businesses.
• C) It is a type of disability insurance.
• D) It is the most highly desired form of insurance for most employees.

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Definitions:

Interest Expense

The charges an entity must pay for the use of borrowed capital over a period.

Lease Liability

An obligation representing the present value of future lease payments that a lessee is committed to making under a lease agreement.

Capital Leases

Lease agreements that involve the lessee effectively owning the asset and accruing its benefits and drawbacks, subject to certain criteria.

Operating Lease

A contractual arrangement giving the lessee temporary use of the property, with continued ownership of the property by the lessor.