Business Owner Solutions
Business Owner Solutions
Life Insurance Strategies
While life insurance is never something that we want to think about when we are busy living our lives, it is an incredibly important facet of managing our finances. This is perhaps more important for business owners than anyone else, as business owners often have a more complicated financial life than others. Starlight Financial is here to help all business owners navigate the world of life insurance, and help you determine the smartest strategy for you, as well as your business and your employees. Keep reading to learn of the various life insurance strategies we can help you with.
Tax Free Retirement
Tax free retirement seems like an ideal ending to a lifetime of savings. Unfortunately, tax-free retirement is very difficult to create. 401(k)s and IRAs, the most commonly used retirement savings funds, are taxable. We can help you find the best fit for your particular situation and goals.
Pension Maximization
Pension maximization refers to the process of couples purchasing a life annuity for their older partner, which then covers both individuals. This annuity is used to help fund retirement until the spouse with the life annuity dies. This life insurance strategy allows the extra money from only purchasing a single annuity to be used as a type of income.
Golden Hand Cuffs
Golden handcuffs are a set of financial incentives put in place to help retain key employees. This is a common practice among industries that have highly-compensated employees who move from business to business. Golden handcuff tactics include offering stock options for key employees and providing yearly bonuses.
Executive Bonus
An executive bonus is another way in which companies can provide benefits to key employees or executives of their company. These benefits usually include permanent life insurance policies, death benefits, and retirement income supplements to retain key employees. Executive bonuses must be considered fully deductible expenses, and are not subject to the established qualified plan limits.
Buy-Sell Agreement
Buy-sell agreements, or buy-out agreements, are legally binding agreements between the co-owners of a company. This agreement, consisting of several legally binding clauses, governs the steps that must be taken if a co-owner dies or is forced to leave the company. These clauses place rules on who can buy the leaving partner’s shares, what constitutes a buyout, and the price that must paid for the acquisition of these shares.
Key Person Insurance
Key person insurance is necessary to be prepared for the sudden loss of a key executive of a company. If this key executive’s death would have a substantial negative impact on the company, this payout would provide the company time and money to find a new individual to takeover this role.
Split Dollar Agreement
A split dollar life insurance policy is an arrangement between an employer and an employee, that allows these two parties to split a life insurance policy. This policy can be split with cash values, death benefits, and dividends among other things. This agreement allows employers to provide their employees with affordable and flexible life insurance policies, along with a wide range of other economic benefits for both parties.
A Dual Executive Split Dollar Bonus is composed of two separate agreements, a bonus agreement and a split dollar agreement. This bonus uses a life insurance policy to supply a key employee or executive with a retirement benefit, while also establishing a death benefit protection for the employee’s beneficiary after they have died. There are strict rules about when this bonus must be made, thus allowing the bonus to bypass the 409A plan rules and restrictions.
Marshall and Stephens Free Appraisal Program
Whether you are selling your business or adding shareholders, there are many reasons to get a business valuation. For any buy, sell or business succession plans business owners should know the value of their business. It is for this reason that we offer free appraisal through Marshall & Stevens. We provide you with a professional and independent calculation of value based on three years' worth of balance sheets and/or income statements by the American Society of Appraisers standards. We do not just input the data: one of our valuation experts will work to interpret the data and give a meaningful valuation of your client's business and will help you every step of the way.
Retaining High Value Employees
Retaining key employees is a major concern for companies across the world. With employee turnover on the rise and companies struggling with retention rates, it is important that businesses implement strategies to secure key employees. Salary equality, achievement recognition, talent management and recognition, competitive benefit packages, and employee perks are among the many ways that businesses can encourage high value employee retention. We can help you devise a sound plan to make sure that your best employees want to stay on with your company.
Long Term Disability Options
Long term disability coverage ensures that a portion of an employee’s income is supplemented if the employee sustains an injury on the job. Worker’s compensation is restricted to employees who injured themselves at the workplace. There are a few different types of long-term disability plans available, such as shared cost, employee paid, and employer paid, and most require that the employee must be working at the company for a specific amount of time before they are eligible for this benefit.
Business overhead expense insurance ensures the insured’s overhead expenses are maintained if they become disabled in some way. These policies are typically designed for businesses that produce their revenue with a very limited number of employees. Rent, interest payments, equipment management, and utilities are among the list of things that are typically covered in these overhead expenses.
Student Loan Repayment Coverage
With student loan debt being so common, it is unsurprising that there are now ways to ensure that a student’s payments are still being taken care of if they are injured or disabled and cannot work. Student loan repayment coverage is available as an option with long-term disability plans. There are limitations to the amount of money employees can receive for student loans each month, and payments from their long-term disability benefits are usually made directly to the loan payment provider.
If you would like to request more information about these business owner solutions, contact a local agent at Starlight Financial. Located in New Albany, Louisville, Pikeville, Florence, and Lexington, Kentucky; Phoenix, Arizona; Kingsport, Tennessee; Linton, Indiana; Fredericksburg, Virginia; and coming soon to Southern Illinois, Starlight Financial can provide your business with the support you need.