Which of the following is an example of third-party policy ownership?

Third-party policy ownership refers to a situation where someone other than the insured person owns the insurance policy. In this context, partnership insurance is a prime example because it typically involves business partners purchasing life insurance on each other’s lives to protect the business in the event of a partner's death. The policy is owned by one partner but has a beneficiary designation that benefits another partner or the business itself.

Whole life insurance, term insurance, and universal life insurance can all be structured as either individual or third-party policies; however, they more commonly represent ownership where the insured individual is also the owner. Partnership insurance explicitly illustrates the third-party aspect, as the business partners are acting on behalf of the business rather than solely for personal benefit. Thus, it serves as an essential facet of business continuity planning, emphasizing the relevance of such arrangements in protecting financial investments in corporate structures.