Triple Protection Plans

A Triple Protection PlanSM can help you retain one of your most prized assets — your employees, who are a vital part of your business’s success.

A business-owned life insurance policy is at the core of the plan and helps to meet three needs: key person protection for the business, a bonus schedule designed to motivate and retain employees, and personal protection for the key employee’s family.

Key person protection helps provide liquidity to the business to replace lost profits or to recruit, hire, and train a qualified replacement in the event of a premature death. The proceeds can also be used for business continuation or overhead expenses.

The cash value of the life insurance policy aids in retaining employees with a Private Bonus Plan. This plan can offer a more immediate award for remaining with the company by using a bonus structure that encourages employees to stick around for the required number of years to get the bonus. As the business owner, you get to decide when and what amount of bonus should be given to the employees you choose. The build-up of cash value inside of the life insurance policy funds the bonus payments. These bonuses may be contingent on production and thus, only payable while the insured is still employed with your business and successfully contributing. The bonuses are considered income to the employee and are generally deductible by the business, when paid. Consult with your accountant for more information about how the plan may impact your tax situation.

The policy also helps provide personal protection for the employee’s family. The business can share a portion of the death benefit with a personal beneficiary chosen by the insured through an Endorsement Split Dollar arrangement. This sends a message to the employee that the employer cares about his/her family. This personal protection may give the insured’s family some additional financial support and security they need at a difficult time.

Being proactive by providing your employees an incentive to stay committed to your business and helping to ensure that your business will be protected in the event of an unforeseen loss is the backbone of the Triple Protection Plan. Contact your Federated marketing representative for more information about this flexible plan and how it might benefit your business and your employees.

Triple Protection Plans (jpg)
Triple Protection Plans (pdf)

This article is for general information and risk prevention recommendations only and should not be considered legal, coverage, financial, tax, or medical advice. The information may be subject to regulations and restrictions in your state. There is no guarantee following these recommendations will help reduce or eliminate losses. The information is accurate as of its publication date and is subject to change. Qualified counsel should be sought regarding questions specific to your circumstances. All rights reserved.

Published Date:January 20, 2020

Categories: It's Your Life