{"id":1572,"date":"2011-04-19T13:33:00","date_gmt":"2011-04-19T20:33:00","guid":{"rendered":"https:\/\/www.keypersoninsurance.com\/?p=72"},"modified":"2024-12-16T15:31:40","modified_gmt":"2024-12-16T15:31:40","slug":"retirement-planning-key-man-insurance","status":"publish","type":"post","link":"https:\/\/webdesign.quoteplicity.com\/keyperson\/retirement-planning-key-man-insurance\/","title":{"rendered":"Retirement Planning and Key Man Life Insurance"},"content":{"rendered":"\t\t
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Many business owners recognize the threat of losing a key person and ultimately protect their businesses with key man insurance. But more often than not, they fail to see a golden opportunity to create value by combining\u00a0 the idea of retirement planning and key man life insurance.<\/p>

The most basic use of key man or key employee life insurance is to protect your company<\/a> in the event of the untimely death of a major contributor to the “bottom line”. However, an often overlooked use of key man life insurance is to provide supplemental retirement benefits to YOU, the business owner.<\/p>

In this case, key man life insurance serves a dual purpose.\u00a0 In addition to protecting the company, a cash value life insurance policy can ensure that money is available at a future date to supplement retirement.\u00a0 If key man life insurance is properly structured, it may provide an attractive addition to your retirement package.<\/p>

How It Works<\/strong><\/p>

\"retirement<\/a>When a company purchases key man insurance, the business typically owns the policy, pays the premiums, and is the beneficiary. When incorporating retirement planning and key man life insurance, there are several strategies constructing the plan.<\/p>

The company can bonus the money to the key person or business owner and have them own the policy and name their own beneficiary. This option is known as the executive bonus arrangement and there are advantages and disadvantages to this type of structure. Additionally, there are other options such as a non-qualified deferred compensation arrangement.<\/p>

This strategy is a bit more complicated but essentially has the company purchasing and owning a policy on the key person and includes a vesting schedule where the cash values are “vested” to the key person over time.<\/p>\t\t

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Types of Policies <\/strong><\/p>

Several different policies can be used to provide supplemental retirement benefits to key executives and business owners including whole life insurance, universal life insurance, \u00a0indexed life and variable universal life insurance. \u00a0The business owner\u2019s needs, risk profile, and aggressiveness in terms of investment all play a role in deciding which policy is best.<\/p>

Benefits to the Employee<\/strong><\/p>

One of the biggest benefits of linking retirement planning and key man life insurance is that any cash accumulated inside the policy grows tax deferred. \u00a0One vested, the key person can pull out money tax-free through loans and withdrawals. This can provide a fantastic supplement retirement income.<\/p>\t\t

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trusted by 5,000+ clients<\/p>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Get Personalized Quotes Tailored to Your Company\u2019s Needs<\/p>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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\n\t\t\t\t\t\n\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\tExplore Your Options<\/span>\n\t\t\t\t\t<\/span>\n\t\t\t\t\t<\/a>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t

Benefits to the Company<\/strong><\/p>

When a company pays premiums into a permanent (non term) key man insurance policy a cash surrender value begins to accumulate over time.\u00a0 This cash value can be counted as an asset on the balance sheet and used for a variety of business purposes such as meeting cash flow needs, collateral for securing a loan or supplementing retirement programs.<\/p>\t\t

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\n\t\t\t\t\t\n\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\tBook Consultation<\/span>\n\t\t\t\t\t<\/span>\n\t\t\t\t\t<\/a>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

Many business owners recognize the threat of losing a key person and ultimately protect their businesses with key man insurance. But more often than not, they fail to see a golden opportunity to create value by combining\u00a0 the idea of retirement planning and key man life insurance. The most basic use of key man or […]<\/p>\n","protected":false},"author":2,"featured_media":2204,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23,402,17],"tags":[],"class_list":["post-1572","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-retirement","category-business-planning","category-exit-planning"],"_links":{"self":[{"href":"https:\/\/webdesign.quoteplicity.com\/keyperson\/wp-json\/wp\/v2\/posts\/1572","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/webdesign.quoteplicity.com\/keyperson\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/webdesign.quoteplicity.com\/keyperson\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/webdesign.quoteplicity.com\/keyperson\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/webdesign.quoteplicity.com\/keyperson\/wp-json\/wp\/v2\/comments?post=1572"}],"version-history":[{"count":4,"href":"https:\/\/webdesign.quoteplicity.com\/keyperson\/wp-json\/wp\/v2\/posts\/1572\/revisions"}],"predecessor-version":[{"id":6445,"href":"https:\/\/webdesign.quoteplicity.com\/keyperson\/wp-json\/wp\/v2\/posts\/1572\/revisions\/6445"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/webdesign.quoteplicity.com\/keyperson\/wp-json\/wp\/v2\/media\/2204"}],"wp:attachment":[{"href":"https:\/\/webdesign.quoteplicity.com\/keyperson\/wp-json\/wp\/v2\/media?parent=1572"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/webdesign.quoteplicity.com\/keyperson\/wp-json\/wp\/v2\/categories?post=1572"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/webdesign.quoteplicity.com\/keyperson\/wp-json\/wp\/v2\/tags?post=1572"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}