Which of the following would most strongly support the decision to purchase key-person life insurance by a firm?

Question

Quizplus · Accepted Answer

Key-person life insurance is purchased to mitigate the financial risk associated with losing a key member of a business. Option C, the availability of a means of financing the purchase of a deceased shareholder's interest, directly addresses this risk by ensuring that the business can continue to operate without disruption if a key member passes away. The age and extent of ownership of key persons and financial ability of the business to pay premiums are important factors to consider, but they do not directly support the decision to purchase this type of insurance.

Which of the Following Would Most Strongly Support the Decision