The primary purpose of a key person insurance policy is to provide funds on the death of the life assured directly to the deceased's:
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A. B. C. D.B
The primary purpose of a key person insurance policy is to provide financial protection to a business in the event of the death of a key employee. The policy pays out a lump sum benefit to the business, which can be used to cover expenses related to finding and training a replacement, paying off debts, and ensuring the continuity of the business.
The life assured in a key person insurance policy is the key employee who is insured. The policy is usually taken out by the business, with the key employee being the life assured and the business being the policyholder and beneficiary.
In terms of the answer choices provided, none of them are entirely accurate. A key person insurance policy is not designed to provide funds directly to the deceased's children, spouse, or estate. Instead, the policy pays out a benefit to the business that can be used to cover expenses related to the key employee's death.
In some cases, the business may use the benefit to provide financial assistance to the deceased's family, such as by offering a severance package or paying for funeral expenses. However, the primary purpose of the policy is to ensure the continuity of the business and protect it from financial loss.
Therefore, the correct answer to this question is none of the above.