Small business owners are looking for strategies to address needs that include retaining key talent, protecting their business and developing a solid transition plan.
Life insurance can be an effective solution for succession planning, key employee coverage, and executive benefit planning.
Owners may be responding to a variety of challenges, including concern for family, employees and customers, retirement uncertainty, investment recovery, finance control and the struggle to maintain a competitive edge in their business.
Get to know your clients
Owners focused on talent and retention
Owners in a competitive environment focused on attracting key talent and retaining key talent. They may want to use a combination of compensation and benefits to address this need.
Owners concerned with key employees
Any business with a top executive or other employee responsible for the profitability of the organization that needs financial protection from the expenses and losses caused by the death of their key employee.
Solutions to consider
- For owners focused on talent
- For business protection
An executive bonus plan can use life insurance as a fringe benefit for the owners, or as an incentive to attract and retain top talent.
To learn more, read Lincoln's case study: Keeping your competitive edge. (PDF)
A split-dollar plan may provide a cost-efficient way for you to offer selected employees valuable death benefit protection, supplemental retirement benefits or both.
To learn more, read the case study: A cost-efficient way to reward and retain your key employees. (PDF)
A Supplemental Executive Retirement Plan (SERP) is an employer-paid deferred compensation agreement that provides supplemental retirement income to a key employee, based on the employee meeting certain vesting or other specified conditions. Informally funding with life insurance provides the potential for strong cash value growth that can be used to pay the promised supplemental retirement income.
To learn more, read Lincoln’s case study: Retaining top talent (PDF)
A buy-sell agreement can establish the terms and fair market value for the sale of your business interest and may help ensure the business continues without disruption. Funding with life insurance can provide a lump sum of cash that may be used to purchase a deceased owner’s business interest, generating immediate liquidity for estate taxes, an income stream for loved ones or other needs.
To learn more, read Lincoln's case study, Protect the future of your business. (PDF)
Key person life insurance can provide a source of income to replace capital lost because of a key employee’s death, fund the recruitment and training efforts to replace the employee*, and help cover other expenses as the company transitions.
To learn more, read Lincoln’s case study, Protecting your business investment. (PDF)
*Annual increase in policy cash values and death benefit proceeds may have corporate alternative minimum tax implications.
How much life insurance does my client need?
Use this life insurance calculator to help address your client's needs and their financial situation.
Will your client's savings last a lifetime?
Our life expectancy calculator can help determine how much they'll need to provide for their family and themselves.