Which of the following statements about life insurance for businesses is correct?

Life insurance for businesses plays a crucial role in maintaining the financial health and stability of the organization. When a business takes out life insurance, it can provide essential funds to cover various expenses in the event of an owner's death or the passing of key employees. This financial cushion can help ensure that the business continues to operate smoothly, allowing for the settlement of debts, funding of key employee replacements, or even continuation of business operations without major financial disruptions.

In addition, life insurance can also facilitate the buy-sell agreements between business partners. Such agreements stipulate how a partner's share of the business will be handled upon their death, ensuring that the remaining partners have the necessary funds to buy out the deceased partner’s interest, thereby maintaining control of the business.

The other options do not capture the complete functionality and benefits of life insurance for businesses. For example, life insurance is not limited to covering only owners or large corporations; it also applies to key employees and small businesses. Additionally, it serves a broader purpose than just personal life insurance needs, as it directly impacts the business's financial strategy and risk management.