Corporate Life Insurance:

There are many reasons why people choose to buy life insurance protection. It is extremely important to have adequate coverage based on your own individual needs and desires. One of the most common reasons to purchase life insurance is to provide tax-free dollars to your loved ones. There are other financially important reasons for buying life insurance such as corporate needs. In a business situation life insurance proceeds can be used to buy out a partner or to help bring in a "key" individual to continue and run/operate the company.

It is important that your insurance consultant (broker) be extremely knowledgeable about today's market and the different programs that are available.

Life insurance can be used for:

Corporate

• Key person coverage provides you with tax-free funds to hire a new individual to replace the "key person" that has passed away
• Business Continuation, Buy Sell protection
• Offsetting income tax on death

Our life insurance specialists will work with you to identify your needs and affordability. They will demonstrate a variety of products that are available. They will solicit the insurance market for the best rates and most comprehensive packages. They will demonstrate the differences between term, whole life or universal life. They will educate you so that you have a clear and concise understanding of all the different programmes that are available and help you to determine the right choices for youself.

Designed to meet your short-term needs. Our Brokers will shop the insurance market for the most competitive and affordable term insurance products. These products will address your individual short-term goals while offering you the flexibility to expand your coverage as your needs change. Term Insurance is less expensive when you first purchase the plan, and becomes much more costly as the years go by. Term insurance is generally purchased for a short term need such as a 20-year mortgage, or in a partnership buy-out situation. This type of policy normally terminates prior to the insured passing away.

Provides guaranteed level premiums and guaranteed insurance coverage for life. There is a guaranteed cash value as well as paid up features. The level premium is higher than initial term insurance premiums, but this higher premium contributes towards a significant tax-deferred savings component.

A permanent insurance plan with a possible investment component at the end. Universal Life Insurance coverage meets your life insurance needs, while providing you with the potential for tax-free growth. There is a separate identifiable savings component. However the funds are not guaranteed and are based on several investment options and varying rates of return.

A shareholders’ agreement normally sets out rights and obligations of the shareholders that go beyond the basic ownership of shares. The shareholders’ agreement can cover many topics such as what happens if a shareholder decides to leave the company, what will the process be if any disputes arise, the ability to pledge the shares of the company as security for loans, mandatory retirement, what happens in the case of a disability, and the ability to sell shares to third parties.

Normally, one of the components of a shareholders’ agreement is the buy-sell provisions, which allow for the orderly transfer of shares upon death, retirement, disability, bankruptcy, matrimonial breakdown or disagreements between shareholders. Without such provisions, an unexpected death of a shareholder could result in the remaining shareholders having to deal with the deceased’s beneficiaries, who will likely obtain ownership of the deceased’s shares. It is up to the shareholders to determine how detailed or how simple the agreement should be. A simple agreement may not be much help in resolving disputes when a situation occurs that is not considered in the agreement.

Please click on the links below for more information on Buy-Sell Agreements and to review sample agreements.

• Overview of Buy-Sell Agreements
• Shareholder Agreements - Introduction

• Criss-Cross Purchase with Personally Owned Life Insurance
• Criss-Cross Purchase Using Corporate-Owned Life Insurance
• Redemption by Operating Company
• Redemption by Operating Company from Surviving Spouse
• Holding Companies - Criss-Cross Purchase
• Combination of Corporate Redemption and Criss-Cross Purchase

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