What relationship does a business entity have with the disability buy-sell agreement?

A disability buy-sell agreement is a legal contract that outlines how a business will handle the departure of an owner due to disability. The role of a business entity in this arrangement is crucial, as it typically owns the insurance policies that are designed to fund the buy-sell agreement. By owning the policies, the business ensures that it has the necessary funds to buy out the disabled owner's share, thus maintaining continuity and stability within the company.

This ownership structure is fundamental because it allows the business to access the insurance proceeds without delays or complications, ensuring that the financial responsibilities are managed smoothly when a disability event occurs. It may also provide tax advantages and simplify the process of transferring ownership shares.

The other choices do include relevant aspects of how business and insurance can interact, but they do not accurately represent the core function of a business entity in a disability buy-sell scenario. The beneficiary designation, marketing responsibilities, or claims handling are not the primary roles of the business in the context of a buy-sell agreement.