Planning Tools for Businesses
Protect against the Five D's.
Death, Disability, Disaster, Divorce, Disagreement
The must have's to protect yourself and your business against the 5 D's!
Buy-Sell Agreements: A buy-sell agreement is a contract that defines the terms of how a business will be transferred upon the death of an owner, and makes sense for any business entity, including corporations, partnerships, LLCs and even proprietorships. A buy-sell agreement can ward off infighting by family members, co-owners and spouses and help keep the business intact
Dual Executive Reward is built on the foundation of two simple agreements – a Bonus Agreement and an Endorsement Split Dollar Plan – using the same life insurance policy to provide a retirement benefit for a key employee and death benefit protection for the employee’s loved ones in the event of premature death.
Business Overhead Expense: Help protect against the unexpected with Business Overhead Expense insurance because it is your company. Insurance offers assurance that your business can continue running, in the event, you become disabled due to a sickness or injury, by covering business expenses.
Business Loan Repayment Rider: A Business Overhead Expense Disability Income Insurance policy with the Business Loan Repayment Rider provides a meaningful benefit to both you and your lender. It can help you, the business owner, cover expenses if you are unable to work due to a sickness or injury. It is extremely important to the lending institution, as it can help the business owner fulfill their loan obligation.
Salary Continuation Planning: A disability salary continuation plan is a corporate-sponsored benefit generally designed to replace part or all of an executive’s income in the event of his or her disability. Smaller firms with active owner-managers will be more likely to see the advantages of a salary continuation plan as a way to insure themselves and other key employees against disability, while using the tax code to their advantage.
Business Valuation: A proper and accurate valuation of the business is crucial to establishing an effective buy-sell agreement.
Attract & Retain Key Employees:
- Nonqualified Deferred Compensation: Nonqualified deferred compensation plans (NQDC) allow employees to set aside a portion of their income with the expectation of receiving a payment or benefits at some point down the road. Life insurance can be appropriate for this strategy because of the death benefit protection it provides—along with the cash value accumulation that can be accessed for future needs.
- Executive Bonus Plans:These plans allow clients to pay a bonus that is exempt from IRS approval to any employee(s) of their choosing. The bonus can then be used to fund life insurance coverage for the employee and their family.
- Split Dollar Plans Split dollar plans have been used since the 1950s to split the costs and benefits of needed permanent life insurance for both owners and key employees. Recent IRS rulings now make plan requirements very clear regarding the taxation and design of these plans. Split dollar agreements can be structured as either loans (very effective in today’s low interest environment) or as an economic benefit taxed to the executive at term rates.
Key Person Loss: Key Person Loss Talented employees are one of the most valuable resources for many businesses. Key Person Insurance helps your clients protect against the financial loss associated with the premature death of key employees.