Group Executive Benefits
Key Person Insurance
Key person insurance is simply life insurance on the key person in a business. In a small business, this is usually the owner, the founders or perhaps a key employee or two. These are the people who are crucial to a business–the ones whose absence would sink the company. You need key person insurance on those people. Key person term life works by a company purchasing a life insurance policy on a key employee, pays the premiums and is the beneficiary of the policy. If that person unexpectedly dies, the company receives the insurance payoff. The purpose of key man life insurance is to help the company survive the blow of losing the person who makes the business work.
The company can use the insurance proceeds for expenses until it can find a replacement person, or, if necessary, pay off debts, distribute money to investors, pay severance to employees and close the business down in an orderly manner. In a tragic situation, key person life insurance gives the company some options other than immediate bankruptcy.
Non-qualified deferred compensation plan
To overcome the limits of qualified retirement plans, many employers are offering top executives something extra – a non-qualified deferred compensation plan. Under this voluntary arrangement, each selected executive elects to defer a certain amount of future income (deferral can be salary or bonus). Upon retirement, you pay the executive his or her deferred compensation as additional retirement income.
When business ownership changes hands, the timing can be expected (retirement) or unexpected (death or disability). In either case, owners have a duty to prepare for a graceful exit, and that means setting the terms of the transition in advance.
A buy-sell agreement spells out who’s buying, who’s selling, and how much it’s going to cost – before the fact. That way, owners receive the full value of their interests, new ownership falls into the right hands, and the business never skips a beat. To fund the cost, Lifeline Employee Benefits can help you decide how much your business can comfortably absorb, and how to economically insure the balance. Plus, we’ll help see that ownership:
•Control ends up in the right hands
•Value is settled for estate purposes
•Interests are paid in cash
•Transfer agreements are suitable and clear-cut
Voluntary benefit products allow you to offer your employees comprehensive insurance options, while helping you manage benefit costs. With Lifeline Employee Benefits, we simplify the enrollment process for you and your employees. Below are just a few of the benefits:
•Term Life Insurance
•Accidental Death & Dismemberment