What does Cross Purchase Plan mean? Read on to discover the definition & meaning of the term Cross Purchase Plan - to help you better understand the language used in insurance policies.
Cross Purchase Plan
A cross purchase plan is a legally binding agreement that allows partners in a business to buy another partner's shares of the business in the event of that partner's death, incapacitation, or retirement. It details the division and purchase of shares and is essential to business continuation planning. In the context of insurance, partners often purchase the deceased or leaving partner's shares using the proceeds from a life insurance policy.
We hope the you have a better understanding of the meaning of Cross Purchase Plan.