Life insurance Solutions for Business

Life insurance can protect your business from the financial impact that follows the death or long-term disability of you or one of your key employees. There are a number of solutions available that can be tailored to fit your company.

Key Person

Key Person insurance is taken out on an employee that is integral to the functionality of a company. At the loss of that person, the company would suffer financially. Key Person insurance reimburses the company for the business loss incurred by the death of this person.

Second-to-Die

Second-to-Die policies are commonly written on two business partners of a company. The proceeds of a Second-to-Die policy only pay out after the second person has died.

Stock Redemption

Stock Redemption, through Section 303 of the IRS Code, permits a company to redeem part of the stock of an owner who has died, without the proceeds of the estate of the beneficiaries being considered a dividend. This allows the corporation to serve as a tax-free source of funds for the deceased owner’s estate settlement costs.

Cross-Purchase

A Cross-Purchase Buy-Sell agreement is a plan to administer the transfer of management and ownership in a partnership or corporation when a partner or stockholder dies. There are many benefits to a Cross-Purchase Buy-Sell agreement, including the preservation of the business interest for surviving family members, immediate funds to pay estate settlement costs, and further income for surviving family members.

Disability Buy-Out

Where a Cross-Purchase Buy-Sell is put into place to protect a company when an owner is disabled (or dies), a Disability Buy-Out is often established to provide funding for that Buy-Sell agreement. Some of the advantages of a Disability Buy-Out is that it creates an immediate market price for the business, assures that funds will be available for the purchase, assures employees and customers of stability within the company, and assures that the active owners continue to control the business.

Executive Bonus

An Executive Bonus is an employer-paid, tax-deductible life insurance fringe benefit for employees. The policy is owned by the employee, and is a real positive for the employer, as it is tax-deductible, easy to administer, and provides the employer with tax-leverage for cost savings.

Deferred compensation

Deferred compensation is an incentive plan that allows an employer to provide certain employees with future compensation (at a pre-selected date) for services they render currently. By offering such a plan, employers are able to retain good employees and attract potential employees. In addition, this is not a government-regulated program, so government approval is not needed, and the compensation will not be taxed until the employee receives it.

Business Overhead Expense

Business Overhead Expense (BOE) insurance is created to reimburse a business for expenses in the event a business owner becomes disabled. A business overhead expense policy pays a shorter benefit of one to two years after a pre-determined waiting period. This benefit precedes the likely sale or closure of the company due to the disability of the owner.

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