The death of a shareholder of a closely held corporation does not terminate the corporation, but it may have serious consequences concerning the continuation of the business and the disposition of the deceased shareholder's stock (including the possibility of unwanted heirs or outsiders acquiring the stock and becoming involved in the business).

Again, the solution is a properly designed and executed buy-sell agreement. The agreement should reflect the goals of the people making the agreement, clearly and in great detail. Some agreements require the other shareholders to purchase the stock of the deceased shareholder at the time of death. Another type of agreement has the corporation buying and "redeeming" (holding as treasury shares) the shares of the deceased shareholder.

How much life insurance should an individual own?

Rough "rules of thumb" suggest an amount of life insurance equal to 6 to 8 times annual earnings. However, many factors should be taken into account in determining a more precise estimate of the amount of life insurance needed. Important factors include:

• Income sources (and amounts) other than salary/earnings
• Whether or not the individual is married and, if so, what is the spouse's earning capacity
• The number of individuals who are financially dependent on the insured
• The amount of death benefits payable from Social Security and from an employer sponsored life insurance plan
• Whether any special life insurance needs exist (e.g., mortgage repayment, education fund, estate planning need) etc.

It is recommended that a person's insurance advisor be contacted for a precise calculation of how much life insurance is needed.

What's the difference between term and permanent life insurance?

A main difference between term and permanent life insurance is that term life insurance has an end date, for example at age 80, whereas permanent life insurance provides coverage for life.

Term life insurance is generally the lower in cost when compared to permanent coverage. However, permanent life insurance can offer both protection and a cash value.

What kind of care is covered by long term care policies?

Covered expenses can vary from policy to policy. In a comprehensive policy, benefits are paid for services delivered in nursing facilities, assisted living facilities, adult day care centers, or at home. A non-comprehensive policy restricts the benefits to services that are provided in nursing facilities. Care is further subdivided into skilled care and custodial care. Skilled care is generally ordered by a physician under a plan of treatment, and is provided 24 hours a day. It is usually provided in a nursing home. Personal care or custodial care helps a person perform ADLs (activities of daily living) - assistance that can be provided in almost any setting.