Asset Protection and Conservation

The Problem The death, disability or serious illnesss of a business owner can result in

• Immediate loss of income to the deceased owner's family.
• Disruption of management.
• Reduced profits.
• Creditors demanding immediate payment.
• Lack of cash to meet debts and settle other financial obligations.
• Difficulty in selling shares, especially at a price near true market value.

The Solution This solution is suitable for sole proprietors, partnerships and corporations. The solution is

• The business owner buys a policy to cover the events of his/her death, disability and serious illness.
• When death, disability or serious illness takes place, proceeds from the insurance policy will be used to pay off business and personal debts.
• Thus, business and personal property can pass to his/her heirs at full value.

Key Employee Incentives and Protection

The Problem The loss of a key employee to a competitor or death can result in

• Loss of business income and profits.
• Creditors losing confidence. Credit becomes harder to get, loans are called in and suppliers deliver goods on a "cash on delivery" basis.
• Loss of important customers and major clients.
• Additional costs to find and train a replacement.

The Solution This solution is suitable for sole proprietors, partnerships and corporations. The solution is

• The business buys a policy to cover the events of the key employee's death, disability and serious illness with the business being the applicant, owner, premium payor and beneficiary.
• When death or disability or serious illness takes place, proceeds from the insurance policy will be used to replace lost revenue, finance cost of replacing the employee, and assure creditors that their loans will be repaid.
• If a key employee leaves the company, the policy is surrendered and the cash accumulated is paid back to the business.
• If key employees remain until the policy matures, the cash accumulated can be used as an additional source of retirement income.
• The plan can also be used to provide the employee with an income in the event of total and permanent disability or serious illness, and provide compensation to the employee's family in the event of death.

Business Continuation

The Problem The death of a business partner can result in

• Ownership of the deceased's share (but not the job) passing to the heirs.
• Difficulty in selling the deceased's share at fair market value.
• Lack of cash to pay the deceased partner's debts and other financial obligations.
• Serious disruption of management. Unqualified heirs may wish to become active or they may sell ownership to an outsider or even a competitor.
• Creditors insisting on immediate payment.
• Loss of profits and uncertainty about the future success of the business.

The Solution This solution is suitable for partnerships and corporations. The solution is

• Execute a written buy-sell agreement. The deceased partner's share will be sold to surviving owners at a fair market value. This market value can be periodically reviewed.
• Each shareholder is the applicant, owner, premium payor and beneficiary of the policy on each co-shareholder.
• In the event of a shareholder's death or total and permanent disability or serious illness, each surviving shareholder will use the policy proceeds to purchase an equal share of the former shareholder's interest.

This solution provides valuable advantages :

• Guarantees sale of share of partnership at a full and fair value.
• Provides a smooth transfer of partner's interest at death or disability.
• Ensures that non-liquid stock is converted to liquid income, providing a fund for the benefit of the deceased's family.