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Life Insurance terms
The life market, products and distribution.
Buy-sell agreementA contract among a business's owners that sets who can buy a departing owner's share, at what price, and how the purchase is funded.Corporate-owned life insurance (COLI)Life insurance a company buys on its employees' lives, with the company as owner and beneficiary, often used to fund benefits or cover key people.Cross-purchase agreementA buy-sell arrangement in which each surviving owner personally buys a departing owner's share, usually funded by life insurance the owners hold on one another.Entity redemptionA buy-sell arrangement in which the business itself buys a departing owner's interest, usually funded by company-owned life insurance on each owner.Key person insuranceLife or disability insurance a business owns on a critical owner or employee, paid to the business to offset the financial hit of losing that person.Split-dollar arrangementAn agreement in which two parties, usually an employer and an executive or a company and its owner, divide a life insurance policy's premiums and benefits.