Trending “Executive” Benefit Alert!
Employer-paid Asset Protection, with Golden Handcuffs
Employers are always looking for new ways to improve their benefit program and retain top talent.
Retaining key employees, leveraging a golden handcuff type benefit, is nothing new. Employer-paid group long-term care (GLTC) programs were a huge hit in the 1990s - 2012, when all the largest providers left the market, and the industry died. Still, nothing new here.
So, what’s different and trending?
Employer-paid Permanent Life Insurance, with a Long-Term Care Rider, and fully paid up within 10 years. Yes, this benefit offering is one of the newest, and hottest, Executive Benefit Programs.
Why?
The employer can identify a class of key-employees, or Executives to exclusively offer the program to. As an employer-paid benefit, coverage can be secured on a true Guarantee Issue basis. Upon issuing coverage, the Permanent Life Insurance provides an instantaneous death benefit, and well as Long-Term Care Protection in the event of a long-term care event. As the employer pays premiums on behalf of the key employees, cash values accumulate. With an Accelerated Payment Option, such as a 10-Pay, the Permanent Life policy’s premium can be fully paid up within 10 years. After 10 years, the key employee(s) have their own fully paid-up permanent life insurance policy with a full death benefit, long-term care protection, and access to their policy’s cash value. The cash value can be leveraged to take loans, against the policy. Or the key employee has the option to surrender the policy and “cash the policy in” for the policy’s cash surrender value.
The 10-Pay, helps the Employer retain top talent. Should the key employee leave before the 10-year period, the Employer has the option to stop funding the policy. Sure, the Executive port coverage with the accumulated values if they leave before the 10 years. However, the key employee would be responsible for paying the higher accelerated option premiums until the plan is fully paid for. The longer the key employee stays with the Employer, the greater the accumulated cash value, and the less premium that remains to be paid.
Permanent Whole Life Insurance, with a LTC Rider, and paid on a 10-Pay basis by the employer, is a resurrection of the old Group LTC plans, but better. These plans offer the guarantee that premium will not increase once fully paid-up, unlike GLTC plans which have seen numerous rate increases. And unlike GLTC where no benefit is realized unless the insured collects for a long-term care loss, Permanent Whole Life with LTC Rider provides the possibility of a benefit for death, long-term care protection, and accumulated cash value.
Navis Benefits Group specializes in designing Employer-paid Permanent Life with Long-Term Care protection programs, on an Accelerated Payment Option basis. Ask how Navis Benefits Group can help you with this trending benefit.
