Insurance for Business Owners
As a business owner, your professional and personal needs are intertwined. Your business activities directly support your family needs so protecting both is critical. Business owners also have greater tax advantage options they can take advantage of.
Greg Brown offers business owners
- KEY PERSON PROTECTION
- BUY-SELL INSURANCE
- BUSINESS OVERHEAD EXPENSE
- BUSINESS LOAN PROTECTION
- SHARED/SPLIT CRITICAL ILLNESS INSURANCE
- CORPORATE INSURED ANNUITY
- EMPLOYEE BENEFIT PLANS – HEALTH AND DENTAL
KEY PERSON PROTECTION
Crucial to the success of any business are the owners and key employees. Should anything unexpected happen to owners/senior management/key sales people, the profitability and ongoing viability of the business could be severely impacted. Bank loan covenants, revenues and client relationships can be severely hampered. Insurance strategies protecting against both death and disability can be structured in a tax advantaged manner to minimize financial disruptions during prolonged absences of key owners/managers/employees.
Most partnerships and Corporations will have provisions within their corporate and partnership agreements to provide for the orderly and timely transition of shares and ownership in the event of a purchase, dissolution or death. How to pay for these is a more complicated process. Setting a savings plans aside to accumulate funds is one way, however, it may not be sufficient and limits liquidity for operating and capital needs.
Establishing Life Insurance arrangements is an economical and flexible way to provide funds to pay for buy-sell agreements. Depending of the partnership arrangement, insurance policies can be held in either the corporate name or individually. Funds from an insurance policy will ensure the timely payment of funds to ensure a quick and orderly transition of ownership of the company.
Reviewing values regularly is critical to ensure the value of the insurance policies keep pace with the value of the company as it continues to grow.
BUSINESS OVERHEAD EXPENSE
If anything were to happen to a key principal or employee of a company, how would the daily operations of the company be impacted – Sales, Production, Operations, etc.? Business Overhead Expense coverage is a form of Disability Insurance that will cover daily production and operation costs of a business while an owner/principal or key person is injured or sick and can’t work. This ensures company bills continue to be paid or funds are available to hire staff to fill in during times of need.
BUSINESS LOAN PROTECTION
Most businesses have some form of bank financing – either corporately or personally financed through a bank, leasing company, mortgage. Many banks and leasing companies both require life insurance coverage to protect their financial interests and offer creditor insurance to protect their interest. Creditor Insurance is held by the lender and the lender is the beneficiary, giving business owners little control or flexibility should they change financing arrangements as business conditions change and it may not be sufficient to cover other company needs. Having individual insurance coverage (owned either by the company or individually) provides business and business owners with the coverage they need, customized for their needs and in most cases it is more cost effective.
SHARED/SPLIT CRITICAL ILLNESS INSURANCE
Protecting owners/principals and key employees against major illness such as cancer, Heart Attack, Stroke, etc can be done in a tax efficient manner using a Shared Critical Illness Arrangement. This provides the company with capital to maintain operations during major illness of key owners/employees treatment and recovery periods. Should there never be a claim, premium payments are paid back to the principal.
CORPORATE INSURED ANNUITY
Maximizing income in today’s low interest environment is very challenging. A Corporate Insured annuity provides both income for current needs, while ensuring funds are available for family and estate needs when you pass away. The company/corporation purchases a non-prescribed life annuity and a life insurance contract. The annuity covers the cost of the insurance policy and supplements current income needs. On your passing, the tax-free death benefit is paid out.
EMPLOYEE BENEFIT PLANS – HEALTH AND DENTAL
A company’s most valuable asset is it’s human capital – it’s people. Whether you’re a small owner/operator business or one with many employees, there are many ways to structure Health and Dental plans. These plans do not have to be costly or complex to administer.
Health Spending account arrangements are a simple and cost effective way to provide flexible Health and Dental arrangements for owner/operators or small businesses. They allow for great flexibility and are simple to administer, thereby allowing business owners to focus on their business and not administration.
Larger organizations can take advantage of more customized Health and Dental plans that can be customized to promote corporate values and retain valued employees. As an insurance broker, we take the time to understand corporate needs to properly structure a plan and then shop the market to find the most cost effective alternative for the company.