The category that is NOT a business use of life insurance is:
4. Business liquidation.
Explanation:
1. Business continuation: Life insurance can be used to ensure the continuity of a business in the event of the death of a business owner. It provides funds to buy out the deceased owner's share, allowing the business to continue operating smoothly.
2. Key employee: Life insurance can be used to protect a business against financial losses that may occur due to the death of a key employee. The business can receive a payout to cover costs associated with recruiting and training a replacement.
3. Nonqualified executive benefits: Life insurance can be used to provide additional benefits to key executives beyond what is available through qualified retirement plans. This can help attract and retain top talent within the organization.
4. Business liquidation: Business liquidation typically refers to the process of selling off a company's assets to pay off its debts and distribute any remaining funds to stakeholders. Life insurance is not typically used in this context.
In summary, while life insurance can serve various business purposes such as ensuring continuity, protecting key employees, and providing executive benefits, it is not commonly associated with the process of business liquidation.
