If your organization employs individuals who are vital to its success, life insurance can help protect you from chaos caused by their abrupt absence. These insurance solutions can give your organization options should you lose your company’s key person or people without warning.
Life Insurance for Company Stakeholders
There Are Many Life Insurance Options for Employers.
Key Person
This design provides liquidity to the business in the event a key employee were to pass away or become disabled. The key employee may control revenue generating relationships that would move elsewhere without the key employee. There will be an additional cost to find a replacement. Creditors may decide to call existing loans if a business loses their key employee. A Key Person policy will provide the liquidity needed to help the business through a transition.
Business Succession
Businesses typically implement a buy/sell shareholder’s agreement that spells out how a business will be transferred at the death, disability or retirement of a business owner. Life Insurance and Disability insurance is used to create the liquidity needed to fund the agreement in the event of death or a disability. These agreements can be setup as an entity purchase or cross purchase. The marketing pieces will address this in more detail.
Employee Retention
Non Qualified Deferred Compensation plans as well as Executive Bonus plans can be used to recruit, reward and retain key talent.
Supplemental Life Insurance Retirement Plan
This is a life insurance policy design where we maximum cash accumulation and minimize death benefit and expenses. The cash value can be withdrawn to supplement a retirement plan on a tax neutral basis via the loan provision in a life insurance policy.
Loan Protection
For business loans that require protection from the borrower’s death, a life insurance policy can be purchased in which we add a collateral assignment to the lender. At the time of a claim, the life insurance proceeds will be paid to the lender up to the loan balance due. The remaining balance will be paid to the insured’s beneficiary.