Business Planning

Business Planning encompasses all the goals, strategies and actions that you envision taking to ensure your businesses survival and growth.

Profit-making business planning is all the general business planning that must be done to start and run a successful business. The best known example of this type of business planning is the business plan. The business plan isn’t a do-it-and-forget-it business planning exercise but a living document that needs to be updated throughout the lifecycle of your business.

Once the business has officially started, profit-making business planning will center on setting and meeting goals and targets. While some businesses make business planning an annual event, business planning is most effective when it’s done frequently and consistently. The business planning process of reviewing progress on business goals and targets and setting new ones should take place at least monthly.

Daily business planning is an incredibly effective way for individuals to focus on achieving both their own goals and the goals of the organization.

Contingency business planning (also known as business continuity planning) is the type of business planning that focuses on dealing with crises. A business contingency plan is a proposed implementation plan to deal with some new emergency, event or new information.

Life insurance may be the best means available to help a business protect itself, provide for an orderly continuation, retain valuable employees, and ensure future security for it’s owners and key employees. Find out how to tap into this vast and growing market.


Business Continuity Planning

For businesses with multiple owners, especially small companies, a buy-sell agreement is often an attractive arrangement to protect the viability of the business in the instance of a death or departure. While there are many variables and options that can be incorporated into a buy-sell agreement, some business operators may want to consider using a life insurance policy to fund the buy-sell agreement.

This guide surveys aspects of buy-sell agreements and how they may benefit clients and business owners.


Executive Bonus Plan

Executive bonus plans are designed to reward and retain key employees, often at the executive or owner level. Using cash-value accumulation insurance policies, the company may reap tax benefits for executive bonus payments in this financial structure.

Click here to access a guide detailing how cash-value accumulation insurance can be used in an executive bonus plan.


Restrictive Executive Bonus Arrangement (REBA)

Similar in spirit to an Executive Bonus Plan, a Restrictive Executive Bonus Arrangement (REBA) is a reward structure for executives and high-ranking personnel. In a REBA, the employer issues a bonus income payment (and may receive a tax deduction). The executive then uses that payment to purchase a life insurance policy that may have restrictions on access as set by the employer.

Click here to access a guide that explains how Restrictive Executive Bonus Arrangement (REBA) can benefit your business clients.


“B” Trust

Consumers with a significant amount of wealth accumulation are likely concerned with the tax burden their beneficiaries or heirs may face upon their death. One potential solution for clients in this position is the establishment of a “B” Trust, also known as a shelter or bypass trust to purchase life insurance.

Click here to access a concept sheet about how this structure can alleviate estate tax burdens for your clients.


Executive Legacy Plan

With an Executive Legacy Plan, a company enters a financial arrangement similar to a Charitable Gift of Life Insurance, whereby participating executives have life insurance policies on them with a death benefit paid to their charity of choice. The company pays the premiums for the coverage, either directly to the insurance company or to the charity selected, which then pays the premium. There may be tax benefits for this arrangement for the company, with some restrictions. A structure like this may entice high-ranking executives who are already well compensated.

Click here to access concept pages about this type of executive reward structure.


Buy-Sell Planning

A business Buy-Sell Arrangement is often a viable financial structure to secure the continuation of a business in the event of a co-owner’s death, disability, or departure.

This guide outlines in great detail the specific benefits of funding this arrangement with life insurance.


Supplemental Executive Retirement Plans (SERP)

High earning executives looking to maximize their employer retirement programs may be concerned with the limitations presented by qualified plans. With a SERP, an employer can establish a non-qualified retirement program that goes above normal types of qualified retirement plans like 401(k)s and IRAs.

Click here for a concept guide that explains how SERPs can be structured for deserving employees.


Buy-Sell Using Cross-Purchase Arrangements

Used to protect a business in the event of death or disability of owner, a cross-purchase arrangement is structured so that the remaining owner or owners purchase the deceased’s interest in the business from the deceased’s or disabled’s heirs. Cross-purchase arrangements are similar in concept to buy-sell arrangement, with the main difference being that instead of the business entity purchasing the remaining interest or stake, it is actually the owner (s). This type of binding structure will often appeal to small-to-mid-level businesses and can be funded with a life insurance policy.

This concept guide examines how cross-purchase agreements function and how they may be benefit for your clients.


Non-Qualified Deferred Compensation

Employers and Executives that want to overcome the limitations provided by qualified retirement plans may want to consider a Non-Qualified Deferred Compensation arrangement. With this benefit structure, a non-qualified deferred compensation contract is drafted between the company and executive. The executive elects to have a portion of compensation (salary or other benefits) deferred and the employer purchases a key person insurance policy for the employee.

Click here to access a concept sheet that details this compensation arrangement.


Entity Purchase Arrangement Using Life Insurance

This type of arrangement is another variation on a buy sell agreement, with the company serving as both owner and beneficiary of a life insurance contract issued on participating owners. As with other buy-sell agreements, Entity Purchase is designed to secure a company’s future in the event of an owner’s death, disability, or departure.

Click here to access a guide that outlines Entity Purchase Arrangements.


Non-Qualified 401(k) Using Life Insurance

Similar to non-qualified deferred compensation plans, non-qualified 401(k)s with life insurance, often called 401(k) look-alikes, allow employers to reward executives over their qualified compensation.

Click here to access a guide that details Non-Qualified 401(k) Using Life Insurance.


Restricted Endorsement Bonus Arrangements

Businesses looking to reward key executives, while reaping a tax benefit, may want to consider exploring Executive Bonus Plans and Restricted Endorsement Bonus Arrangements. These forms of compensation can entice executives to remain with a company longer and can reward them over and beyond qualified plans and non-qualified salary deferred and supplemental executive retirement plans, the latter two, now facing new tax code regulation.

Click here for a concept guide on how REBAs and Executive Bonus Plans can work for your company clients.


Section 79 – Permanent Benefit Plans

Many employers offer group health insurance coverage, but through Section 79 of the Internal Revenue Code, they can offer also group life insurance coverage. Typically this will involve the company purchasing a master policy, often a term life policy. It may also be possible to offer life insurance with cash value, provided the group coverage meets certain requirements.

Click here to access a concept guide that details Permanent Benefit plans.


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