Insurance cover provided for any partnership. In usual cases, partnership insurance is taken so as to allow the business to keep on performing in a regular manner in case a partner is dismembered, or dies. There are two common plans. The cross purchase plan, which is used by partners, allows them to purchase life insurance for themselves, and list each other as their beneficiaries. That way, if one of the partner dies, the other will receive the benefits. Usually best for a company with a couple of partners. An entity plan however, is one in which a partnership buys life insurance policies on each of the partners, and becomes the beneficiary on their policy.
Under an entity plan, the partnership purchases the life insurance policies on each partner, and is the beneficiary on each policy. Should one partner die, the partnership uses the insurance payout to buy the deceased person's interest.