Buy-Sell benefits are tax-free

The Savvy Soup Company also purchased a Buy-Sell policy. All of the following are true about this type of policy EXCEPT:

 A Buy-Sell is a disability insurance policy.

 A Buy-Sell policy provides a benefit to allow the partners or owners or officers of closely held businesses to purchase the ownership interest of a disabled partner or owner.

 Premiums for these policies are not tax-deductible as a business expense.

 The Buy-Sell benefits are taxable.

Correct

The Buy-Sell benefits are tax-free.