Shareholders in small companies agree that on death or retirement of a shareholder the continuing shareholders have an option to purchase the outgoing shareholder’s shares. Life insurance puts money into the hands of the continuing shareholders at the relevant time to fund the purchase.

1. When two blameworthy vessels collide, liability will be apportioned between them according to their degree of fault and, following the running down clause, there will be two payments, i.e. cross liability. Admiralty law prescribes a single liability settlement, a method favourable to the receiving shipowner. 2. Where two or more jointly insured parties, (marine or non-marine) have legal rights against each other, the liability cover will respond as though a separate policy had been issued to each named insured. This is made possible by a cross liabilities or severability of interest clause.

A method used in partnership insurance whereby each partner takes out a policy on his own life for the amount required, pays the premium himself and assigns the policy to his partners in order to put the money into their hands on his death or retirement. Any gain under the policy is subject to capital gains tax.