Bob and Tom start a business and take life insurance policies out on each other, naming each other as beneficiaries. If Bob dies after their business is dissolved, who will receive Bob's policy proceeds?

In this scenario, since Bob and Tom took out life insurance policies on each other with each as the beneficiary, the critical detail is the beneficiary designation. The policies remain valid and enforceable as long as the terms of the policy do not state otherwise upon the dissolution of the business.

When Bob dies, the insurance proceeds will be directed to the person named in the policy as the beneficiary, which is Tom in this case. The naming of beneficiaries typically holds regardless of the status of the business or any personal relationship changes unless modifications are made to the policy.

Understanding this, if Bob had designated Tom as the beneficiary before the business was dissolved and did not change that designation after the dissolution, Tom will receive the proceeds of Bob's life insurance policy upon his death. The status of the partnership does not inherently affect the validity of the beneficiary designation in the insurance policy itself.