New York State Life Insurance Exam Questions Practice Question
The type of insurance used to indemnify a firm for the loss of earnings brought about by the death or disability of an officer or other significant employee is
Correct Answer: C
Rationale: Indemnifying a firm for lost earnings due to the death or disability of a key employee is best covered by key person insurance. This type of policy protects the business from financial strain caused by the absence of a crucial individual.
Option A, business continuation life insurance, focuses on ensuring the business can continue operating but does not specifically address income loss. Option B, business overhead insurance, covers fixed expenses rather than lost earnings. Option D, employee welfare insurance, pertains to benefits for employees, not directly to the business's financial protection against key personnel loss.
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