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Which of the following is NOT an example of a business use of Life Insurance?

A.Executive Bonuses
B. Key Person
C. Workers Compensation
D. Buy-sell Funding

1 Answer

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Final answer:

Workers Compensation is not a business use of life insurance. It is a mandatory insurance program to benefit employees who get injured on the job, rather than a policy taken out for business interests like the other options.

Step-by-step explanation:

The option among those provided that is NOT an example of a business use of life insurance is C. Workers Compensation. While executive bonuses, key person insurance, and buy-sell funding are all strategies involving life insurance to secure financial interests in a business, workers' compensation is a distinct form of insurance.

Businesses use life insurance to provide executive bonuses as a form of compensation, insure against the loss of a key person or employee crucial to the business, or fund a buy-sell agreement, which is a contract that dictates how a partner's share of a business is reassigned if that partner dies or otherwise leaves the business.

However, Workers' Compensation is a mandatory insurance program that provides compensation to employees who suffer job-related injuries and illnesses. Employers are required by law to pay a small percentage of the salaries they pay into state-run funds that provide benefits to injured workers, which is not directly related to a life insurance policy.

User Christine Loh
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