Specialized planning for owners, CEOs and other highly compensated individuals.

Typical Group Life and Disability insurance usually only cover a fraction of a key executive’s high income.  Key Person Life and Disability Insurance is tailored for such key personnel whose continuation in a business is crucial to its success. Polices can be customized to wrap around the group plan and protects the executive’s family and the business in the event of a sudden critical illness or death.  Plans may be structured to avoid taxation of benefits at the time of claim.

Examples of Key Person Benefits

Business Overhead Disability

A Business Overhead Disability policy prevents businesses from going under from regular overhead expenses while the business owner is unable to work due to disability. These types of policies will typically pay for employee salaries, rent and utilities, among other expenses.

Buy Sell Agreements

Buy-Sell Agreements are intended to protect a business after the death of a key employee. Buy-Sell Agreements (also known as Continuation Agreements) are tied to and funded by life insurance policies. The agreement includes details of the transfer of business interest by the key-person (or his/her estate) upon a certain triggering event-usually death, disability or retirement.  The surviving or continuing business owner or partner can rest assured knowing that they will be able to purchase the key-person share without interference from other survivors of the key person and his/her estate.

Executive Medical Reimbursement Plans

An executive medical reimbursement plan is a supplemental, group executive medical expense reimbursement insurance policy. It allows employers to reimburse their key employees for medical expenses not otherwise covered by regular group health insurance.  In addition to covering deductibles, this type of policy covers a range of services including prescription and over- the-counter drugs, dental and vision expenses, hospital expenses and more.

Key Person Life Insurance

Key Person (Key Man) Life Insurance is designed to protect your business should one of the main partners pass away unexpectedly. This policy will name your business as the beneficiary and premiums are billed under the business name. Benefits and premiums are tied to the value you have established through financial records. Benefit payments are made to the business to help minimize financial loss should your business lose the insured (key personnel) due to death.

Tax Advantaged Executive Retirement Plans

Key person retirement plans use ERISA legislation to offer tax shelter, section 105 life insurance plans which also offer tax shelter and other strategies.  These can be either Defined Compensation or Defined Benefit plans.  Carmichael Associates calls in outside specialist when needed in this planning process including ESOP experts, actuarial specialists, pension administrators.

Discrimination testing, ROI and investment safety are all aspects of the planning process.

As a Supreme Court justice once proclaimed, there is nothing wrong with taxes, it is just that one should not have to pay more than he/she is legally obliged to pay!