A closely held corporation has two active shareholders, each owning 50% of the company's shares. If one shareholder becomes totally disabled and unable to work, which of the following insurance arrangements would best facilitate the purchase of the disabled shareholder's interest by the remaining shareholder?

Question: A closely held corporation has two active shareholders, each owning 50% of the company's shares. If one shareholder becomes totally disabled and unable to work, which of the following insurance arrangements would best facilitate the purchase of the disabled shareholder's interest by the remaining shareholder?

Answer options: ✅ Disability Buy-Sell insurance

• Key Person Disability insurance
• Business Overhead Expense insurance
• Disability Income insurance

Correct answer: Disability Buy-Sell insurance

Explanation: Disability Buy-Sell insurance provides funds for the non-disabled shareholder to purchase the disabled shareholder's interest, ensuring business continuity and a fair exit for the disabled owner.