Valuable employees are an asset you can’t afford to lose. Keeping your most talented employees may mean offering them incentives that will help them achieve their own financial goals. This is often accomplished by purchasing life insurance policies that will benefit both you and your employees throughout their employment. Before choosing a life insurance policy for your key employees, you will need to know what you hope to accomplish and how much you are willing to invest in the people you rely on most.
Stay Bonus Plan
Stay Bonus Plans offer benefits to both you and your employees. Buying a whole life policy for a key employee will allow you to offer them a bonus once the policy begins to hold cash value. It also provides you financial compensation if something happens to your employee during the time they are working for you. The key element with this type of policy is to provide each employee with a financial bonus they can rely on each year while making sure your company can survive if something happens to them, in which case you need to find a way to work without them.
162 Executive Bonus Plan
A 162 Executive Bonus Plan allows the employee to purchase a whole life insurance policy. With the bonus provided by their employer, they can pay for the premiums and reap the rewards of the policy on their own terms. Because the employee owns the policy, their family will receive the death benefit if something happens to them. The employer, in essence, pays for the policy through the bonuses they pay the employee each year. While every employee will have different financial needs as they continue to get older, they will all benefit from having an insurance policy in place that will help them pay off their debts or secure their family’s future.
Supplemental Executive Retirement Plan
A supplemental executive retirement plan involves the employer offering extra retirement benefits if the employee commits to working for the company for a specific period of time. This is often accomplished by buying a whole life policy and then using the policy’s accrued cash value to pay the retirement benefit. If the employee has worked for the company for many years, their retirement benefit can be quite large if their whole life policy was purchased when they first started working.
Keeping your most talented employees may require you to offer them additional benefits. When you are ready to learn more about how life insurance policies can help you reach those goals, call our experts at Northeastern Group LTD. We have the experience and knowledge of how life insurance works and can help you determine what types of plans will work best when it comes to offering your employees the benefits they need. Contact us today to learn more!
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