hard · Certified Financial Planner Risk Management
The Esker household owns a business with four equal partners, valued at $6,000,000. They wish to implement a buy-sell agreement funded by life insurance but are concerned about the high administrative cost of managing multiple policies.
Which recommendation best aligns with the Rank 6 principle of the CFP Mindset hierarchy?
- Implement a Cross-Purchase agreement requiring 12 separate life insurance policies.
- Apply for 16 policies under a Cross-Purchase arrangement to ensure each partner is fully covered.
- Establish an Entity Redemption agreement requiring four life insurance policies.
- Wait until the business valuation is updated before choosing an agreement type.
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