Business Owners and Corporations are often looking for innovative ways to supplement benefit packages to both attract and retain key executives. One very accepted and effective way of accomplishing their goal is to offer an Executive Compensation Package that could include well designed insurance products such as life insurance, disability insurance and critical illness insurance.
The products can be structured so as to offer the following benefits to the executive:
1. Life Insurance:
- Can create additional financial security to cover funeral expenses, educations costs, reduce debt and provide future income for the Executive’s family.
- The coverage is guaranteed and portable and can follow the executive through his/her career and into retirement.
2. Disability Insurance:
- Carved out from the regular traditional group coverage, these programs will ensure that the executive maintains his/her regular income with the highest standard of coverage when a disability occurs that prevents him/her from continuing to earn income.
- A Return of Premium can be built into the coverage to reward the executive for remaining healthy. Up to 50% of the premium paid into the policy every 8 years can be returned to the Executive Tax Free.
- The coverage is guaranteed and portable and can follow the executive throughout his/her career.
3. Critical Illness Insurance:
- Will provide financial security in the event of the diagnosis of a critical illness for both the executive and their family. This product will pay out a lump sum, tax free benefit to the executive enabling him/her to make decisions regarding their present situation and future plans, without affecting their assets or savings.
- A Return of Premium can be built into the product to reward the executive for remaining healthy. Up to 100% of the premium paid into the policy can be returned tax free, dependant on how the plan is structured when purchased.
- The coverage is guaranteed and portable and can follow the executive throughout his/her career and into retirement.
The policy or policies may be purchased by the business/employer, or it may be owned and funded jointly by the employer and the executive. The executive’s dependants would be named as the beneficiary on any portion of a policy requiring a beneficiary designation.
Any employer paid portion of insurance premium must be reported as a taxable benefit to the Executive. It is also important to remember that the amount of premium reported represents a reasonable cost for the benefit received.
For assistance on establishing an Executive Compensation package for your key executives, please give Health Risk Services a call today!
DISCLAIMER: Please be advised that the information on this web site is intended to present a broad variety of general information as simply and accurately for your knowledge as we possibly can. In no event does this information form part of or apply as a legal document. Therefore, please note that rules, conditions and industry practices discussed may be changed over time. Please consult Health Risk Services Inc. with specific questions.
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