Consider these questions:
- Are you absolutely certain that your current advisor searches the entire market to find the best asset protection solution(s) for you?
- Would your business suffer if you lost certain key employees?
- Have you considered what will happen to your business and family should you unexpectedly die or become disabled?
- Would your business suffer if you lost certain key employees to a competitor?
- Do you have a plan for Long-Term Care?
- When is the last time you thoroughly evaluated either your life insurance policies or life insurance needs?
- Are you confident that your current level of disability insurance is adequate to provide for your family, should you become disabled?
- Is your business compliant with IRS Section 101 (J)?
When we decided to offer these unique services, a tremendous amount of research and due diligence was done to find the absolute best partner capable of providing “best in class” expertise and support in all of the areas that typically exist under the category of Asset Protection Planning Services. Ultimately, we chose Crump Insurance Services. For those of you who may not be familiar with Crump Insurance Services, they are currently the nation’s leading distributor of insurance and provider of insurance planning support services, with access to over 100 of the nation’s leading insurance carriers, offering over 6,000 products. In addition, they have an advanced planning staff that is considered to be among the best in the country.
We think that you will agree that, in order to both survive and thrive, all successful businesses have to do two things well:
- Leverage resources as much as possible, within certain guidelines, in order to grow the business.
- Limit the exposure to certain risks, also within established guidelines.
In keeping with the 2 items mentioned above, we chose to offer these Asset Protection Planning Services because, apart from the day to day aspects of running and growing a business, there are other vital planning areas that are equally important and that must be addressed.
Because Crump provides these types of services for businesses all over America, we ask them to advise us as to the types of Asset Protection Planning Services we should offer, based upon the needs expressed by numerous actual businesses owners and other key executives themselves. Based upon their recommendations, here are the Asset Protection Planning Services that are available to you as a member of SCMEP:
Key Person Life Planning
Nearly every business has key people who are critical to the overall success and profitability of the business. Key person life insurance is insurance on the life of a key person, purchased to help reimburse an employer for the economic loss caused by the death of that person. Most businesses do a great job of insuring the “brick and mortar” aspects of their business. Protecting against the loss of key individuals is, unfortunately, very rarely addressed. Fortunately, “brick and mortar” can be replaced, key people cannot.
Click here to view a brief video about Key Person Life Planning (Please be patient while video loads)
Click here for a printable overview of the concept
Business Succession/Buy-Sell Planning
As a successful business owner, you have worked hard to reach your goals and it is probable that your business has become one of your most valuable assets. But, have you considered what would happen to your business and family should you unexpectedly die or become disabled?- Do your heirs have experience operating the business on a day-to-day basis?
- Would your heirs be forced to sell the business?
- Would your heirs recieve a fair price?
- Would the IRS seek a higher valuation for your business?
These are difficult questions to answer. You owe it to yourself and your family to protect your years of hard work. Through proper planning, you can secure the continuation of your business and the financial security of your heirs
Click here to view a brief video about Business Succession Planning (Please be patient while video loads)
Click here to view a brief video about Buy-Sell Planning (Please be patient while video loads)
Click here for a printable overview of Business Succession Planning concept
Click here for a printable overivew of the Buy-Sell Planning concept
NON-QUALIFIED DEFERRED COMPENSATION USING THE SIMPLE EXECUTIVE BONUS PLAN
A non-qualified deferred compensation plan is basically an employer provided retirement benefit, generally informally funded through life insurance products, whereby the employer agrees to pay the key employee an additional retirement benefit at a future point in time. These plans can provide highly compensated key employees with a source of additional income over and above their qualified plan (or, in today’s market, as a supplement to a qualified plan that may have lost significant value). Non-qualified plans do not require formal IRS approval and do not have to meet ERISA requirements. Unlike qualified plans, employers may discriminate in picking and choosing which employees to offer the plan to as well as offering them different benefit levels.Click here to view a brief video about the Executive Bonus Plan (Please be patient while video loads)
Click here for a printable overview of the concept
NOTE: Only the EXECUTIVE BONUS PLAN is shown here. The reason for this is due to its simplicity and popularity. Should there be interest in discussing other arrangements (e.g. Split-Dollar, etc…); this service can accommodate virtually any planning concept request
KEY EXECUTIVE CARVE OUT LONG-TERM CARE INSURANCE
The good news is that you may live a long life! The bad news is that you may live a long life!Long-term care may be one of the most important issues that we face today. Care is expensive and costs continue to rise. Funding is limited and many of these costs must be paid for out-of-pocket. Long-term care insurance (LTCI) provides coverage not available with medical or disability benefits.
In fact, regarding the topic of long-term care insurance, Kiplinger Financial has stated that it is “quite possibly the most important insurance coverage that an individual or couple can have, apart from health insurance”. A comprehensive private long-term care insurance plan:
- Protects family members from having to become caregivers, resulting in their health be significantly compromised.
- Protects a couple or individual from spending most or all of their hard earned assets paying for long-term care services. In fact, if you have not allocated a portion of your assets to pay for long-term care, you may have allocated most or all of your assets to pay for long-term care.
Click here to view a brief video about Executive Carve Out LTC Insurance (Please be patient while video loads)
Click here for a printable overview of the concept.
LIFE INSURANCE POLICY ENHANCEMENT PROGRAM
In the last decade the life insurance industry has undergone a significant transformation. Falling interest rates, advances in underwriting practices, lackluster stock market performance and other factors have affected the performance of many in-force policies.In addition, lower mortality charges, innovative new products and cost efficiencies have created new life insurance products that may provide a greater value to the life insurance consumer.
Often life insurance policies are tucked away and forgotten, with no thought to evaluating ongoing performance. This is unfortunate. A permanent life insurance policy is unlike any other financial vehicle. It has an investment component with an underlying cost structure based on health assumptions. And the strength of the policy relies on many variables that are constantly changing. Just an FYI, it is equally important to have your term policy or policies reviewed as well. We cannot tell you how many term policies we have evaluated where the insured thought they had a good deal and were safe, when in fact nothing could have been further from the truth.
The Policy Evaluation Program (PEP) allows you to review your current policy to determine if it is performing as expected.
Plan Highlights
- You will receive valuable information on the state of the life insurance marketplace today.
- PEP provides an in-depth analysis of the present condition of the existing life insurance policy in an easy-to-read format. This analysis allows you to easily see all of the options that might be available if alterations or modifications must be made to your policy.
Click here to view a brief video about the Policy Enhancement Program (Please be patient while video loads)
Click here for a printable overview of the concept.
Click here for a printable FAQ of the concept.
KEY EXECUTIVE DISABILITY PLANNING
Many corporate long-term disability plans do not protect employees to the extent they expect. Benefit maximums, tax implications, and covered compensation limitations can result in benefits that are far less than expected at claim time. For most employees, two-thirds of their income won't exceed the employer's maximum benefit. But for highly compensated executives, the maximum benefit may amount to less than 50 percent of their take-home pay in the event of a disability. This amount could be lower for highly compensated employees if there is a monthly benefit cap, or if incentive pay or bonuses are not covered. In fact, if premiums are paid by the employer, resulting in the benefits being taxed, the remaining after-tax monthly benefit could be as little as 42% of a person’s regular base income. This is equivalent to a 58% pay cut!To address this problem, employers often purchase (or offer them the ability to purchase) additional individual disability income policies on key executives to bring their total benefit, on a percentage basis, up to the same level of all other employees.
Click here to view a brief video about Key Executive Disability Planning (Please be patient while video loads)
Click here for a printable overview of the concept.
Compliance with IRC Section 101(j)
The Pension Protection Act (PPA) of 2006 includes new IRC sub-sections 101(j) and 6039I, Which set out the disclosure, consent, and reporting requirements for Employer Owned Life Insurance. The new requirements are effective for policies issued or materially changed after August 17, 2006. The thrust of §101(j) is to tax policy proceeds paid to an employer under a life insurance contract purchased by the employer on an employee’s life unless certain conditions are met. Those conditions are relatively straightforward.
Simply put, the disclosure and consent requirements are met if:
- Written disclosure was provided by the employer to the employee prior to issuance of
the policy, stating
- the employer’s intent to purchase life insurance on the employee’s life,
- the beneficiary of the policy (in whole or in part) will be the employer or a “related person” as defined in the Code1, and
- disclosing the maximum amount for which the employee could be insured at the time the contract is issued; and
- Prior to issuance of the policy, the employee provides the employer with written consent
- to being insured under the contract and
- for the coverage to continue after the employee ceases employment with the employer.
Click here to view a brief video about IRC Section 101 (j) (Please be patient while video loads)
Click here for a printable overview of the concept.
In addition to all of the capabilities mentioned above, here is a list of the other capabilities also available through this offering:
- Annuities
- Personal Estate Planning
- Wealth Transfer and Preservation Planning
- Retirement Income Distribution Planning
- Walth Accumulation Planning
- Business Estate Planning
If you would like to discuss any of these concepts in greater detail, contact your local SCMEP agent.
You can find your agent by using our Contact tool in the upper right hand corner of the web page.