Funding a future capital gains tax on the shares of the corporation at death of the owner
Funding a buy-sell agreement at the death of one of the co-owners of the business
Key person coverage, for companies that rely largely on one or more key people, to provide life and disability insurance and to give the company time to recover and replace the key player(s)
Long-term debt retirement coverage in the event of an owner’s or key person’s death
Business overhead insurance, ensuring overhead costs are paid while an owner recuperates from a disability or critical illness
Providing health and dental insurance to your employees can help you attract and retain skilled workers.
Term life insurance or critical illness insurance can cover a business loan or mortgage if you die before it is repaid.
One of your most valuable assets is your ability to earn an income. I can offer disability insurance specifically for business owners.
You may also want to consider buying business insurance to build a pool of tax-exempt capital to:
Finance a living buyout of shares by a co-owner
Provide a supplemental retirement income to the business owner
Business life insurance
If you’re in business, on your own or with a partner, you have unique life insurance needs that depend on the stage of your business’ growth and your long-term goals for you, your family and your business.
Because you own a business, the majority of your wealth is likely tied up in it. You want to protect what you’ve built against unforeseen circumstances such as death or disability; you want to ensure you have liquidity when you need it so you can achieve your goals.
Your needs may include:
Covering a major commitment such as a mortgage or business loan
Retaining key employees and attracting new employees
Ensuring you have the funds to buy a partner’s interest at death or retirement
Supplementing retirement income for you and your spouse tax effectively
Ensuring your spouse’s lifestyle is protected
Ensuring taxes owing on your estate are paid, leaving your assets intact for your heirs
Here’s how life insurance can help:
You can use a permanent life insurance policy to help ensure your business survives your death or the death of a partner or key employee.
Permanent life insurance puts your premiums to work for you by also providing a cash value that you can use to help meet future financial needs or opportunities over your lifetime.
Some permanent life insurance policies have cash values that may accumulate over time. They can help finance a business opportunity, buy out a partner’s interest when they retire or give your business the ability to grow and change.
A permanent life insurance policy is an ideal way to accumulate tax-advantaged savings while you’re alive and helps you leave a meaningful gift, outside of your estate, to your heirs or favorite charity.
Proceeds from a permanent life insurance policy can provide your heirs or estate with the liquidity needed to pay final taxes, capital gains and settlement costs so that you can preserve as much of your estate as possible to pass on to your heirs.
Term life insurance can save you money by providing more coverage for lower premiums and offering you the flexibility to convert to permanent life insurance.
Business disability insurance
As a business owner, you want to protect both your independence and profitability. I offer several types of insurance for business owners to reimburse certain business expenses, help facilitate a buy-sell agreement or help hire a replacement for a disabled employee. Each of these plans includes standard features and optional benefits.
I also offer a variety of disability insurance products to help protect your business if you, your partner or a key employee becomes disabled.
Business critical illness insurance
Critical illness insurance is designed to help financially support patients before, during and after treatment by providing a lump-sum benefit when a critical illness is diagnosed.
If you are a fee-for-service professional or a business owner, you may want to consider some of the potential uses for the funds from a critical illness insurance policy:
Funding a buyout agreement
Key person insurance
Coverage for operating expenses
Business health and dental insurance
As Canadians, we’re fortunate to have one of the best healthcare systems in the world, but government healthcare coverage may not provide all you need.
You may be left to pay for expenses such as:
Enhanced healthcare plans can help protect your employees against these and other unexpected health and dental expenses.
Group retirement plans
I offer clients the support of Canada’s largest network of group retirement specialists who deliver unparalleled service in group retirement and savings plans.
Employers and employees need a leading edge plan provider who will act as a business partner and offer flexible and competitive products. As your financial security advisor and group broker, I offer:
Leading education material and advice including a retirement guide to suit all styles of investors
Vast investment choices with tools that will help employers meet their responsibilities
Market-leading service anytime through your preferred channel
Attract and retain valuable employees with group benefits
Comprehensive group coverage for two to 300 employees
You’ve worked hard to build your business into the success it is today and it’s important for you to exceed your current level of success.
A group benefits plan is an important part of the financial security plan of your business. Under a group benefits plan, financial risk associated with loss of life, disability and health-related expenses is shared and priced based on the lives of a group of people. With a group benefits plan, when a member of the group dies, becomes ill or needs healthcare services, the plan provides compensation according to the terms of the contract.
Investing in group benefits for you and your employees can help you to:
Better attract and retain good people which can also help you reduce costs related to high staff turnover
Access insurance for you and your employees at a reduced cost (compared to most individual insurance plans)
Deduct your premium as a business expense from your taxes, providing a tax-deductible alternative to a salary increase
Provide 24-hour coverage for all benefits, including disability insurance
Help improve morale and decrease incidences of absenteeism, thereby increasing productivity, by providing financial security and support for your plan members when they need it most
Essential features available under a group benefits plan
Healthcare and dentalcare benefits: Help your plan members bridge the widening gap between provincial health insurance plans and the coverage your members and their families need.
Wellness and disability benefits: A collaborative approach to managing wellness and disability in the workplace. Drawing on a comprehensive menu of services, this coverage helps protect you and your employees against the financial impact of income loss due to an accident or critical illness. Critical illness benefits can provides your employees with a one-time, lump-sum benefit of $10,000 to $1,000,000 if they are diagnosed illness with a critical condition as defined in the policy, as long as they satisfy the survival period.
Life and accidental death and dismemberment (AD&D) benefits: Can provide financial support for your plan members and their families in the event of a death or other specified losses as a result of an accident, helping ease the burden of unfortunate situations.
International benefit plans: Provides benefits to employees who are U.S. residents, are Canadian residents working temporarily in the U.S. or overseas, or are new to Canada, and not yet eligible for provincial healthcare benefits.
Group benefits instead of a salary increase
An attractive overall compensation package can help protect an employer’s most valuable asset: your employees.
With government cutbacks and increasing drug, hospital and paramedical costs, giving your employees a pay increase isn’t always the most cost-effective compensation method.
A raise in salary can cost more than you think. Please contact me for a more detailed comparison of what it might cost your business to provide group benefits versus a raise in salary.
A plan to meet your needs
Your business is unique, and so are your people. Whatever the size of your group, with my help, you can offer them a group benefits plan that helps meet their needs and yours, and includes:
Cost-effective management of benefit costs
Ease of plan administration
Detailed management information
Financial security planning for business owners is especially important, to help ensure your business runs smoothly and family concerns are addressed. Succession planning should be one of the elements of your financial security plan.
Although you may feel you have many more years to work in your business, you should have a long-term strategic plan in place. Think about how you should structure your business financially, the role of your employees, when and how your business will reach its maximum value, and how a buy-sell agreement might be structured with an external buyer.
In addition, I’ve provided a checklist to help you think about the aspects of your business succession plan. Contact me to get started.
Contact me today
Your people are likely your most important asset, and provide you with a competitive edge. Creating the group plan your business needs takes experience and knowledgeable advice. To find out more about how group benefits can help make your business more successful, please contact me today.