Business Insurance
What would happen to your business if you weren’t around to manage it anymore? Think about your partners, your revenue, your business value. How would you feel if we could secure your plans?
Buy-Sell Insurance
Many companies have buy-sell arrangements, but they are not always funded. If you have 2+ owners, what would happen to the business if one owner became disabled or deceased? Without insurance, owners typically would use personal funds or business assets to pay out the disabled or deceased partner’s estate. Sometimes, there is not enough liquidity to pay out, which creates additional financial strain.
A buy-sell insurance plan creates the cash to pay out the disabled or deceased partner’s estate without disrupting the other partners. This can include life insurance and disability insurance based on your specific requirements. This way, the deceased or disabled shareholder’s estate receives a lump sum or monthly benefit, while the other shareholders can continue managing the business.
Business Overhead Expense (BOE)
When a business owner becomes disabled, a personal disability plan will pay a monthly insurance benefit to help cover personal expenses. But, you have a second problem; what happens to your company? Regardless of your health, there are monthly bills your company incurs such as rent, property taxes and salaries to keep your business running. BOE insurance keeps your business going when you can’t.
Shared Ownership Critical Illness
Your business has key people that make a significant impact on your revenue. If one of these people became diagnosed with a life-altering illness, your business would need time to replace lost revenue and lost productivity. This strategy creates a tax-efficient solution to obtain coverage at a low cost and also create a retention incentive for your key staff.
The corporation pays for the critical illness insurance benefit only and insures the business owners, shareholders, key employees etc. The corporation is also the beneficiary of the policy if there is a claim. The insured pays the Return of Premium monthly amount only. Typically after 15 years if there is no claim, the individual can receive both the corporations premiums and the ROP premiums in a tax-free lump sum bundle. This strategy offers coverage to the business and a creative way to extract retained earnings in the event of no claim.
Corporate Insured Retirement Plans (CIRP)
Why would a business owner consider corporate-owned life insurance? Successful companies that have substantial retained earnings can self-insure, but is this the most efficient use of your money? These retained earnings are usually invested back into the business or into taxable investments subject to 50% passive income tax. So how can the business owner access these funds personally to retire in a tax efficient way?
A tax-exempt permanent life insurance policy can be purchased with corporate dollars so the savings component of the plan can grow on a tax-free basis. Over time, this can create a reliable retirement income and also preserve an estate that will be paid to your beneficiaries with a tax-free dividend. You can also have access to your money for other opportunities in the future.
Key Person Insurance
The cost to replace a key employee can be significant when factoring in recruitment, HR, hiring, onboarding, lost efficiencies etc. This policy is owned and paid for by the corporation and insures the key employee. It kicks in when a key employee is unable to work or passes away. This coverage
can also ease creditor concerns and help you borrow money by assigning the policy to a lender.
Design My Business Insurance Plan
How do I plan to protect my business?