The Benefit of Whole Life Insurance for Businesses
Life insurances could give out a solid financial foundation and that it likewise serves as an ideal tool for different businesses. Another thing is that organizations may be able to use life insurances for attracting top talents and to also build loyalty by helping out 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 More Protection for the Key Employees
Executives also have high income and most of them in fact need a much larger death benefit protection compared to those which are offered by employer-sponsored group programs. 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. By doing this, it helps the business to set itself apart for recruiting and retaining top talents.
Access on 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 in buying added life insurance through the 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.
Key Employee Retention
A life insurance policy also could be used in helping fund a deferred compensation program that gives more benefits to the retirement of the key employees. In this case, the business will own the policy on the executive and if the employee will retire, the business will use the cash of the policy in providing supplemental retirement income for employees. If in case the executive dies before its retirement, the proceeds are going to be paid to the company. This can then be used in providing death benefits towards the executive’s family as well as to re-coup the premiums.
A Key Employee Insurance
There are so many companies that lose their focus due to the death of a key employee. With life insurance, it can be used in providing protection for the company from possible risk of unexpected deaths of the 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.