Why your Business needs a Whole Life Insurance
A life insurance can actually offer a solid financial foundation and this also serves to be a good tool for various businesses. Organizations in fact could use life insurances to attract the top talents and in building loyalty through helping the employees in protecting their loved ones. This may also be used for added purposes, which includes providing protection for the firm, family and for key employees from an unexpected death.
Some other benefits are as follows:
Adds Protection for the Key Employees
Also, executives usually have higher income and they also mostly need bigger death benefit protection than what’s being offered by an employer-sponsored program. When you offer your key employees ad added life insurance benefits, you are able to make an increased level of protection which suits better with their needs. Through doing this, it can actually help a business in setting itself apart on retaining and recruiting the top talents.
Accessing Cash Values
Businesses who have a whole life insurance policy may borrow from its accumulated cash value for various purposes such as: helping the business during economic hardships, paying for overhead prices or to provide supplement cash flows.
Provides an Executive Bonus
Businesses will be able to help key executives for buying added life insurances through their executive bonus plans. Executives are going to own the life insurance policy and then pays out the premiums and the company bonuses the executives with an amount of which is equal to the tax liabilities and the premiums. Also, the executive may use the cash value of the policy for supplementing their retirement funds or perhaps for other purposes. If ever they accidentally died during the employment process, the policy’s death benefits are going to be paid towards the insured’s family, which is income tax-free.
Retention of the Key Employees
The life insurance policy may also be used to help fund a deferred compensation program of which will give you added benefits to the retirement of key employees. In these cases, the business will actually own the policy of the executive and if the employee will retire, the company could then use the cash of the policy in order to provide a supplemental retirement income for employees. If in case the executive dies before its retirement, the proceeds are going to be paid to the company. The money acquired will be used to re-coup the premiums that were paid and to likewise provide a death benefit to the executive’s family.
A Key Employee Insurance
Some companies lose their focus because of the death of a key employee. Life insurances could be used to provide protection for the company from risks of unexpected deaths of key employees. The policy could be structured in providing the company a death benefit that is equal with the revenue loss and administration costs needed for finding a replacement.