You can identify the employees that your business simply can’t do without in a heartbeat; if one should die unexpectedly, it could cripple a big portion of your business’s income.
With a life insurance policy on the life of a key person in place, and in the event of the death of that key employee, the policy will pay your business a death benefit. The proceeds could be used to help pay off debt, offset lost sales, or cover the expenses that come with recruiting, hiring, and training a new employee.
It’s a competitive world; hiring good talent, and keeping it, can be challenging; life insurance can help. Discover Two Appealing Strategies
Your business provides you and your employees that you select with extra income (a bonus) to be used to buy permanent life insurance. This is called an executive bonus arrangement. As a bonus, it is considered income to your employees, but income tax-deductible to your business, under IRC §162. And your employees may like that they get needed death benefit protection, plus potential access to money through a policy’s cash value.1
The arrangement can include “golden handcuffs.” This means that your employee must meet certain obligations, like staying with the company for a specified time, in order to benefit from the life insurance policy’s accumulated cash value. Note that “golden handcuffs” may impact the business’s tax advantages.
Share the costs, share the benefits.
Your business and an employee split the cost of a permanent life insurance policy, along with the cash value1and death benefit. This is known as a split dollar arrangement. It’s a relatively low-cost way to provide an extra, attractive benefit to an employee. It’s also a cheaper way for an employee to get needed life insurance coverage and potential access to cash value.
You work hard so your business can thrive. You and others depend on it—including your family and employees. You’re aware that, in an instant, your livelihood—your business—could go up in smoke, or could just die a slow death.
You’ve protected your business with property and liability insurance. But have you insured your business’s future?
Life insurance can help. Learn more contact your BGA.
These insights give you an inside look at how your peers are ranking financial priorities for their business, employees and lifestyle, including some benchmarks to consider as you create your own priorities and action plan.
For the 5th survey in a row, business protection is rated the most important solution. Contact your BGA to learn more.
Take your small business benefit offerings to the next level
With unemployment rates at almost a 50-year low and a competitive labor market,* it can be challenging for small business owners to find ways to attract, retain, and reward talented employees.
John Hancock’s unique executive benefit featuring Vitality offers a comprehensive wellness component that rewards key employees for living a healthy life.
Learn more contact your BGA.
Also called a “Section 162 Plan” provides a basic affordable method for small business owners to reward employees. The Employer pays premiums on a life insurance policy owned by the key employee(s). The policy provides an immediate death benefit, and the policy cash values, which grow tax-deferred, can be used by the employee to supplement retirement income. Contact your GA to learn more.
With Principal’s Business Owner & Executive Solutions you can help your clients address the unique challenges family businesses face. Learn more contact your GA today.
A buy-sell agreement funded with life insurance As an owner, you work hard for the success of your business, and you consider the well-being of your family and your employees when you make decisions. One of the most important decisions you’ll make is who will take the reins of your business in the event of the death, disability or retirement of you or a co-owner.
A buy-sell agreement can be vital to your financial future and the survival of your business. It is a buyout contract establishing the terms and fair market value for the sale of an owner’s interest in the business. A buy-sell agreement can help make sure your business continues without disruption. Life insurance is a cost-efficient way to fund your buy-sell agreement. It can provide a lump sum of cash that may be used to purchase a deceased owner’s business interest, generating immediate liquidity for estate taxes, an income stream for loved ones, or to meet other needs. Contract your BGA to learn more.
AIG announces their new underwriting Flex Points Program which provides a greater opportunity to improve offers.
Flex Points Highlights
- Focus on cholesterol ratio vs. total cholesterol for greater accuracy.
- BMI replaces gender-specific height/weight chart, allowing for greater accuracy.
- Family history revised; disease of parents with coronary artery disease or cancer replaced by death of parents.
- Better Choice Preferred is written into underwriting guidelines for the individual impairments involved.
Contact your GA to learn more.
Are your clients looking for cost effective, yet flexible death benefit protection—with the added benefit of attractive accumulation potential? Then Symetra Protector IUL, with its customizable guaranteed coverage and enhanced performance features, is worth a closer look. Contract your GA for more information.