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Business Insurance Products

EXECUTIVE DESIGN BENEFIT

Key Person Life Insurance

An effective way to partially protect your business loss sustained from the death of a key person is through a Key Person Life Insurance. This plan can provide cash to pay outstanding obligations and also use to redeem stock owned by the key person.

Here are the advantages of owning a Key Person Life Insurance. During the life of the key person, the life insurance may strengthen the credit of the business and may provide cash for emergency needs. Upon the key person's death, the life insurance may reinforce the capital structure of the business or pay for the cost of training a replacement.

Key Person Disability Insurance

Your business can protect itself from unexpected financial loss that would arise if a key employee were to become disabled for an extended period of time. The Key Person Disability Policy is owned by the business, which pays the premiums. In the event of a key person's disability, the business receives a tax-free benefit. Since the business is the beneficiary, the premiums are not tax deductible.

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Key Person Selective Benefit Plans

There are additional benefits for key employees that employers may want to consider. Programs such as deferred bonus plans, stock options, split-dollar insurance, supplemental executive retirement plans, or disability wage continued programs are widely used by many business entities.

BUSINESS OWNER

Buy-Sell Agreements

If any business is owned by more than one person, buy-sell agreements designed for disability or death make the most financial sense to protect both the disabled or deceased owner's interest and the interests of the remaining parties. A buy-sell agreement simply establishes the conditions under which one owner (or owners) would buy and one owner (or that owner's estate in the event of death) would sell shares of the business.
In many multi-owner businesses, personal protection concerns extend beyond the desire of the surviving partners to continue the business in the event of disability or death. Another consideration is to include retirement for a planned, voluntary withdrawal by an owner from the business.
In situations where saving for retirement has been difficult, many business owners will view their shares of the business as the equity for retirement. Therefore, many business owners will include retirement in their buy-sell agreements as a way to liquidate a retiring owner's share on a pre-established, equitable basis.

412i

Fully Insured Defined Benefit Plan – 412i

A 412i plan is a type of defined benefit retirement plan where every dollar a business owner or professional contributes to the plan will, in most cases, produce an immediate tax deduction for their company.

Benefits in a traditional defined benefit plan are funded primarily through an investment fund. With 412i plans, the benefits are funded exclusively with contracts issued by an insurance company. All plan assets are either in retirement annuity contracts or a combination of retirement annuity contracts and whole life insurance. Both the annuities and the life insurance have guaranteed premiums and guaranteed benefits.

Since a 412i plan must be funded by a life insurance and/or annuity contract which provide guaranteed benefits under the plan, only an insurance company can offer eligible funding vehicles.