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dc.contributor.authorTauer, Loren W.
dc.date.accessioned2018-08-21T17:09:28Z
dc.date.available2018-08-21T17:09:28Z
dc.date.issued1999-11-01
dc.identifier.urihttps://hdl.handle.net/1813/57777
dc.descriptionWP 1999-28 November 1999
dc.description.abstractBuy-sell arrangements for the death of a co-owner may be funded with life insurance. The mechanisms and details of buy-sell arrangements were discussed. The decision whether to use life insurance was modeled using the expected utility theorem. State dependent utility was used since a surviving partner may become more (or less) risk averse upon the death of a co-owner. Life insurance funding is preferred at relatively low amounts of risk aversion, especially if the surviving partner becomes more risk averse after the co-owner's death. A lower percentage of life insurance would be used if insurance premiums are significantly above actuarially fair premiums. Given currently available insurance rates, most closely held small businesses probably should fund their buy-sell arrangements with life insurance.
dc.language.isoen_US
dc.publisherCharles H. Dyson School of Applied Economics and Management, Cornell University
dc.titleLife Insurance Funding of Buy-Sell Arrangements in Small Businesses
dc.typearticle
dcterms.licensehttp://hdl.handle.net/1813/57595


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  • Dyson School Working Papers
    Working Papers published by the Charles H. Dyson School of Applied Economics and Management, Cornell University

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