A Key Employee policy taken out by a company on a vice president continues after the employee leaves. Where do the death proceeds go if the employee dies and the policy is unchanged?

In the scenario presented, a Key Employee policy, often referred to as a key person insurance policy, is a type of life insurance purchased by a business on the life of a crucial employee, like a vice president. This insurance serves to protect the company's financial interests in the event of the employee's death.

When the policy is taken out on a key employee, the business is typically named as the beneficiary. If that key employee were to pass away while the policy remains unchanged, the death proceeds would go directly to the company that owns the policy, in this case, Company X. This is because the company has a vested interest in the employee's contributions to the business and would use the funds to cover potential losses, hire a replacement, or address other financial impacts stemming from the employee's death.

The fact that the employee leaves the company does not automatically change the beneficiary designation unless explicitly stated. Therefore, as long as the policy remains active and unchanged, the proceeds will continue to flow to the company that originally took out the policy, thereby making it the correct answer.