Blog #45: Controlled Executive Bonus Plan for Life Insurance and Disability Income
(Part 5 of “Valuing the Business”)

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(Presentations in this blog were created using the InsMark Illustration System, Cloud-Based Documents On A Disk and InsMark Business Valuator.)

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Editor’s Note: Blog #45 is the fifth and last in a series of Blogs involving several topics that are associated with the decision to sell a closely-held business, all of which provide opportunities for you to develop some serious production. The series is based on the results of the valuation of Acme Ford, LLC, using the InsMark Business Valuator (powered by BizEquity). (See Blog #41 for details of the valuation.)

Prior Blogs in the series are:

Review Blog #41: If We Sell Our Business, Can We Afford to Retire?

Review Blog #42: Adding Key Executive Coverage

Review Blog #43: Golden Handcuffs for Tom Hamilton, CMO

Review Blog #44: Alternate Golden Handcuffs for Tom Hamilton, CMO

Blogs #43 and #44 involved an examination of non-qualified executive benefit plans for Tom Hamilton, Chief Marketing Officer and a key non-owner executive of the Limited Liability Company owned by George and Marie Grove. The goal is to provide a benefit package to Tom that causes him to remain with the firm for at least the next seven years (including two years after the expected sale of the company).

In Blog #43, we featured a Controlled Executive Bonus Plan for Tom, age 40, that provides him with substantial survivor and retirement benefits from an investment-grade life insurance policy owned by Tom. (These plans are typically funded with Indexed Universal Life or Whole Life with Paid-Up Additions; this Blog series features Indexed Universal Life.)

Premiums are paid from gross-up employer bonuses, a strategy that includes the tax on the bonuses. The plan has a feature called a “Controlled Bonus” where, subject to the terms of a separate Employment Agreement, Tom is required to repay the bonus under certain circumstances such as voluntary termination of employment prior to a certain date or event described in the Agreement or termination by the employer for cause.

Click here to watch a short video of the Controlled Executive Bonus concept and its documentation.

For working Americans below their mid-40s, disability is a more common economic risk than death. A personal disability income (“DI”) policy is an important financial addition that Tom should have in his benefit package, and this Blog will show you how to include it in a Controlled Executive Bonus Plan. We selected a DI policy for Tom with a $7,200 annual premium, a 90-day elimination period, and a monthly non-taxable benefit of $12,750 lasting until age 65 (a potential total benefit of close to $4,000,000).

The Indexed UL policy is the foundation of Tom’s Controlled Executive Bonus Plan. It has more than sufficient participating policy loan values to provide the $7,200 in premiums for the DI policy — in all years but the first where policy loans are typically not available.

George Grove, Tom’s employer, chimes in, “How about we increase the bonus enough to cover the disability premium in the first year, and Tom can use his policy loan values for the rest of them.”

Click here to review the illustration using the Executive Security Plan module located on the Executive Benefits tab in the InsMark Illustration System. As you will see, we have a plan with the following five benefits:

  1. Deductible funding;
  2. Potential recovery of the bonuses if the executive terminates;
  3. Tax free death benefits for the executive’s family;
  4. Tax free disability income for the executive;
  5. Tax free retirement cash flow for the executive.

Note: The Flow Chart on Page 1 of the illustration is not yet part of the InsMark Illustration System as the idea of including a DI policy in a Controlled Executive Bonus Plan just occurred to me. We will add that capacity to Version 18.0 along with a variation that includes long-term care insurance.

In the meantime, if you would like to have working copies of both Flow Charts, email marketing@insmark.com and ask for copies of the “Controlled Executive Bonus Flow Charts from Blog #45” reflecting executive bonus plans coupled with disability income insurance and long-term care insurance. Until we get them in our copyrighted System, the Flow Charts should reflect our copyright at the bottom.

Evaluation Resource

We were able to develop Tom’s combination benefit plan for two reasons:

  1. We were alerted to Tom’s financial value as we reviewed the results of the appraisal of his employer, Acme Ford, LLC, by the InsMark Business Valuator (powered by BizEquity).  Click here if you would like to view our webinar on the InsMark Business Valuator.  Click here if you would like to visit the InsMark Business Valuator website.
  2. For some time, we have been searching for a disability insurance organization to partner with InsMark as part of our Referral Resource network.  As a result, we selected Disability Insurance Services (“DIS”) of San Diego, headed by Dan Steenerson, President and CEO.  I was very impressed with Dan’s organization as I was gathering information for this Blog, most particularly their marketing savvy coupled with their exclusive Analyzer comparing the benefits of several DI policies side-by-side.  Click here to review an example of the DIS Analyzer.

Click here for a three-minute video by Dan Steenerson explaining what we believe are his firm’s key disability resources that may be most applicable to your practice. Back when I was totally involved in production, I decided to stop selling DI policies as the murderous underwriting had simply worn me out. Dan tells me that this issue has lightened considerably, and he addresses this concern in his remarks.

Click here for a link to the InsMark DI Quoting Service to put DIS to work for you. Services include quotes for:

  • Individual Disability Income Insurance
  • Business Overhead Expense Insurance
  • Disability Buy/Sell Insurance
  • Critical Illness Insurance
  • Long Term Care Insurance
  • Bank Loan (ensuring repayment of loans)
  • Key Person

If you have a case where you would like to speak with someone at DIS, contact Ben Coleman, Sales & Marketing Manager, in San Diego at 619.284.8444 x8402 or bcoleman@diservices.com.

Documentation

Documents On A Disk imageThe documentation for the Controlled Executive Bonus Plan is different than a typical Executive Bonus Plan. Version 21.0 (and higher) of InsMark’s Documents On A Disk™ has specimen plan documents for this plan in the Executive Bonus Plan category located in the Key Employee Benefit Plans section. If you use this concept, you will need these documents. (If you include the disability income feature, your client’s counsel should insert the appropriate language. We will add this option in the next enhancement of Documents On A Disk.)

 

InsMark’s Digital Workbook Files

If you would like some help creating customized versions of the presentations in this Blog for your clients, watch the video below on how to download and use InsMark’s Digital Workbook Files.

Digital Workbook Files For This Blog

Blog45.zip

Download all workbook files for all blogs

Note:  If you are viewing this on a cell phone or tablet, the downloaded Workbook file won’t launch in your InsMark System.  Please forward the Workbook where you can launch it on your PC where your InsMark System(s) are installed.

 

To license the InsMark Illustration System and/or Documents On A Disk, contact Julie Nayeri at julien@insmark.com or 888-InsMark (467-6275). Institutional inquiries should be directed to David Grant, Senior Vice President – Sales, at dag@insmark.com or 925-543-0513.

InsMark’s Referral Resources

If you would like assistance with a Controlled Executive Bonus Plan illustration for one of your prospects or clients (or help with other InsMark illustrations), contact any of the Referral Resources listed below. They are all highly skilled at running InsMark software and can help you using your choice of insurance company. Mention my name when you talk to one of our Referral Resources as they have promised to take special care of my readers.

Testimonials:

“As a top national brokerage firm representing many insurance companies, the InsMark Illustration System has everything we need in an advanced marketing presentation system.”
Gary M. Baker, President/CEO, Bloom-Baker/Asensus of New England, Boston, MA

“I really thought I knew all the sales techniques that affect my business, but I do now, thanks to InsMark.”
Sam Keck, Financial Planner, Denver, CO

 

Important Notice

The information in this Blog is presented for educational purposes only. In all cases, the approval of the participants’ legal and tax advisers must be secured regarding the implementation or modification of any planning technique as well as the applicability and consequences of new cases, rulings, or legislation upon existing or impending plans.

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More Recent Blogs:

Blog #44: Alternate Golden Handcuffs for Tom Hamilton

Blog #43: Golden Handcuffs for Tom Hamilton
(Part 3 of “Valuing the Business”)

Blog #42: Adding Key Executive Coverage
(Part 2 of “Valuing the Business”)

Blog #41: If We Sell Our Business, Can We Afford to Retire?
(Part 1 of Valuing the Business)

Blog #40: Leveraged Deferred Compensation

3 Reasons Why It’s Profitable For You To Share These
Blog Posts With Your Business Associates and
Professional Study Groups (i.e. “LinkedIn”)

Robert B. Ritter, Jr. Blog Archive

 

Blog #43: Golden Handcuffs for Tom Hamilton
(Part 3 of “Valuing the Business”)

(Presentations were created using the InsMark Illustration System, Cloud-Based Documents On A Disk and InsMark Business Valuator.)

Getting Started with InsMark Training Video

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Editor’s Note: Blog #43 is the third in a series of Blogs involving several topics that are associated with the decision to sell a closely-held business, all of which provide opportunities for you to develop some serious business.

If you have already read Blogs #41 and #42, you are up-to-speed on some of the issues presented so far for George and Marie Grove regarding the sale of their company. If you have not yet read them, we recommend you do so, and the links are below; however, if you prefer not to read them, this Blog is self-contained and should be useful to you without reviewing the prior Blogs.

Blog #41: If We Sell Our Business, Can We Afford to Retire?

Blog #42: Adding Key Executive Coverage

This Blog discusses an awesome variation of an Executive Bonus Plan for non-shareholder key executives. It is designed to reward such individuals handsomely while also providing a powerful new incentive for them to remain employed. We’ll apply the use of this concept to George and Marie Grove’s company, the firm we have featured in Blogs #41 and #42.

Tom Hamilton, age 40, is the Chief Marketing Officer of George and Marie’s company and is largely responsible for a substantial portion of the bottom line. His current annual compensation is $300,000. This week we’ll examine an irresistible set of golden handcuffs that can be provided to Tom so he remains employed during the next few critical years while plans firm up to sell the business.

Although George and Marie expect the business to be sold in five years, they don’t want the golden handcuffs associated with Tom’s executive benefit plan to be uncuffed until seven years have elapsed. The additional time is to encourage Tom to stay with the new owners for at least two years, a condition that enhances the value of George and Marie’s company to potential purchasers.

The Controlled Executive Bonus Plan

The key difference with this variation of executive bonus is that the business can require a repayment of the bonuses paid to Tom if his employment terminates during the next seven years for reasons other than death or disability.

Other than the bonus recovery provision, this plan for Tom is identical to the classic bonus arrangement where the employer provides a valued executive with a bonus to be used for the purchase of a personally-owned, investment-grade, life insurance policy.

There are two standard sub-sets of an Executive Bonus Plan: 1) single bonus of the premium where the executive pays the tax on the bonus (perhaps by a loan on the policy) and 2) a gross-up bonus, also known as a double bonus, where the bonus is sufficient to cover the premium on the policy and the tax on the bonus. We will illustrate the gross-up bonus and couple it with the controlled bonus feature.

How large should the bonus be? That depends, of course, on the current compensation of the executive, but it should be large enough to get some serious attention from the executive. In Tom’s case, if he is to be convinced to remain with the firm for the next seven years, we’ll need to make it substantial.

Let’s illustrate a $2,600,000 Indexed Universal Life policy with seven premiums of $60,000. Tom is in a 40% income tax bracket, so the company will have to bonus Tom $100,000 a year for seven years in order to cover the policy’s premium and the tax on the bonus. The company is a Limited Liability Company (a pass-through tax entity), so we will use George and Marie’s 40% personal tax bracket to determine the cost of the bonus. The company’s after tax cost is $60,000 a year for seven years, a total of $420,000.

If the plan is successful in keeping Tom with the company, the $420,000 will have been a good investment as the loss of sales to the company caused by his departure has been evaluated at roughly $1,400,000. (We’ll illustrate how this loss is mathematically calculated next week in Blog #44.) If the plan is not successful in retaining him, the company will recover whatever bonuses were paid — a classic case of heads you win, tails you win, what do you have to lose?

Below is a graphic of the results of the Controlled Executive Bonus Plan.

blog 43 graphic of the results of the Controlled Executive Bonus Plan

Notice that Tom is illustrated to receive over $6.2 million in tax free participating policy loans starting at age 65. We accomplished this by including a cost-of-living assumption (“COLA”) on the policy loans which start at $100,000 at age 65, gradually increase to $217,851 by age 85, remaining level thereafter.

Click here to view the Controlled Executive Bonus Plan illustration¹. The Flow Chart of the transaction is on Page 2. The plan costs and benefits are illustrated on Pages 3 – 5, and you can review Tom’s repayment obligations on Page 7. His plan calls for a 100% repayment of the bonuses paid during the first seven years of the plan. It isn’t until year 8 that all cash values are freely his property.

¹ The source of the illustration and the graphic is the Executive Security Plan module on the Executive Benefits tab in the InsMark Illustration System. The Controlled Bonus prompt is located on the Plan details tab only when the following items are selected for Type of Business on the same tab: C Corporation, S Corporation (non-shareholder), LLC (non-member), Partnership (non-partner), Sole Proprietorship (non-owner), and Tax Exempt Organization.

The difference to Tom between Year 7 and 8, for example, is substantial. If Tom quits in year 7, he owes his employer $700,000 with illustrated cash value of $418,145 to help pay it, a shortfall of $281,855. In Year 8, Tom owes no repayment and has full ownership of the illustrated cash value of $448,015, a swing of $729,870 in his favor in just one year. Good enough to keep him on the management team? One would think so.

There are several other ways the repayment of the bonus could be scheduled. Click here for another example. Click here for a more generous example. You will likely think of several other alternatives.

Click here to review some questions that George and Marie and their advisers might ask about the Controlled Executive Bonus Plan.

Evaluation Resource

We were able to develop Tom’s plan for George and Marie’s only because we were alerted to his value as we reviewed the results of their company’s appraisal by the InsMark Business Valuator (powered by BizEquity). This evaluation resource can be of significant use with your business clients as demonstrated in this Blog #43 as well as #42, and #41. Click here if you would like to view our webinar on the InsMark Business Valuator. Click here if you would like to visit the InsMark Business Valuator website.

Alternatives

There are other executive benefits that George and Marie could consider:

COLI-funded Salary Continuation: This is probably not a good idea for a closely-held company expected to be sold in five years.

Loan-Based Split Dollar: This plan takes longer to season than seven years.

Executive Trifecta®: We’ll discuss this one next week in Blog #44.

Final Thought

Would Tom be better of investing the $60,000 after tax results of the seven bonuses in, say, an equity account? Check the graphic below to see the comparison between an equity account and the life insurance. (The equity account runs out of gas in year 40.)

#

Click here to review the full illustration. It is generated by the Other Investments vs. Your Policy module in the InsMark Illustration System.

Documentation

Documents On A Disk imageThe documentation for the Controlled Executive Bonus Plan is different than a typical Executive Bonus Plan. Version 21.0 (and higher) of InsMark’s Documents On A Disk™ has complete specimen plan documents for this plan in the Executive Bonus Plan category located in the Key Employee Benefit Plans section. If you use this concept, you will need these documents. Included are the plan implementation documents as well as a flow chart of the process and a layman’s explanation highlighting the features of the concept.

The specimen plan documentation includes a Restrictive Endorsement Agreement which prohibits Tom from accessing policy values prior to retirement without the permission of his employer. If the parties agree, this Endorsement can be modified by counsel. For example, it might be written to apply only during the bonus repayment term, i.e., seven years in this Case Study.

Click here to watch a short video of the Controlled Executive Bonus concept and its documentation.

 

InsMark’s Digital Workbook Files

If you would like some help creating customized versions of the presentations in this Blog for your clients, watch the video below on how to download and use InsMark’s Digital Workbook Files.

Digital Workbook Files For This Blog

Blog43.zip

Download all workbook files for all blogs

Note:  If you are viewing this on a cell phone or tablet, the downloaded Workbook file won’t launch in your InsMark System.  Please forward the Workbook where you can launch it on your PC where your InsMark System(s) are installed.

 

To license the InsMark Illustration System and/or Documents On A Disk, contact Julie Nayeri at julien@insmark.com or 888-InsMark (467-6275). Institutional inquiries should be directed to David Grant, Senior Vice President – Sales, at dag@insmark.com or 925-543-0513.

InsMark’s Referral Resources

If you would like assistance with a Controlled Executive Bonus Plan illustration for one of your prospects or clients (or help with other InsMark illustrations), contact any of the Referral Resources listed below. They are all highly skilled at running InsMark software and can help you using your choice of insurance company. You don’t need to be licensed for InsMark software to use their services — although if you aren’t, we would certainly welcome your participation. Mention my name when you talk to one of our Referral Resources as they have promised to take special care of my readers.

Testimonials:

“As a top national brokerage firm representing many insurance companies, the InsMark Illustration System has everything we need in an advanced marketing presentation system.”
Gary M. Baker, President/CEO, Bloom-Baker/Asensus of New England, Boston, MA

“I really thought I knew all the sales techniques that affect my business, but I do now, thanks to InsMark.”
Sam Keck, Financial Planner, Denver, CO

Important Notice

The information in this Blog is presented for educational purposes only. In all cases, the approval of the participants’ legal and tax advisers must be secured regarding the implementation or modification of any planning technique as well as the applicability and consequences of new cases, rulings, or legislation upon existing or impending plans.

seperator bar

More Recent Blogs:

Blog #42: Adding Key Executive Coverage
(Part 2 of “Valuing the Business”)

Blog #41: If We Sell Our Business, Can We Afford to Retire?
(Part 1 of Valuing the Business)

Blog #40: Leveraged Deferred Compensation

Blog #39: More on the Magic of Indexed Universal Life

Blog #38: Avoiding a $20 Million Mistake

3 Reasons Why It’s Profitable For You To Share These
Blog Posts With Your Business Associates and
Professional Study Groups (i.e. “LinkedIn”)

Robert B. Ritter, Jr. Blog Archive

 

Blog #42: Adding Key Executive Coverage
(Part 2 of “Valuing the Business”)

(Presentations were created using the InsMark Illustration System, Wealthy and Wise® and Cloud-Based Documents On A Disk.)

Getting Started with InsMark Training Video

Bob Ritter's Blog #42 adding key executive coverage image

Lion all mine image
Zero-Split-Case-Premium-Financing-click-here-to-receive-more-information
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Editor’s Note:  Blog #42 is the second in a series of Blogs involving several issues that emanate from the decision to sell a closely-held business, most of which provide opportunities for you to develop some serious business. If your practice involves retirement and/or estate planning for owners of such firms (or you would like it to), it is impossible to do it effectively without knowing the value of the business.  InsMark has formed a joint venture with a cloud-based business valuation firm named BizEquity to form the InsMark Business Valuator.

Most business valuations cost upward of $8,000 - $10,000.  The InsMark Business Valuator (powered by BizEquity) will do it for $350 ($150 if you purchase a package of 20 valuations.)  It is critical that you understand how the InsMark Business Valuator works, and if this market interests you, we recommend you review two resources before proceeding further -- if you haven’t reviewed them already:

Review a recording of our one-hour webinar on the InsMark Business Valuator (powered by BizEquity) on the InsMark YouTube Channel.

Review Blog #41:  If We Sell Our Business, Can We Afford to Retire?

This current Blog features a solution regarding life insurance coverage on the owner of the business where the InsMark Business Valuator has detected a $1,000,000 loss to the firm should the owner die.

In Blog #41:  If We Sell Our Business, Can We Afford to Retire?  we determined that George and Marie Grove, age 65 and 60, could maintain their current level of net worth (approximately $10 million) while ensuring after tax retirement cash flow of $440,000 a year indexed at 3.00% as an inflation hedge.  To prove this, we used a combination of the InsMark Business Valuator to value the business and Wealthy and Wise® for the proof of the cash flow and net worth.

Key Executive Coverage

(Business-Owned or Personally-Owned?)

George and Marie believe the business will be hurt financially should George die prior to selling it in five years.  The InsMark Business Valuator identifies this loss to the business at $1,000,000.  Click here to view the entire report to see the comprehensiveness of the evaluation.  Note the yellow highlighted sections on Pages 5 and 6 -- the value of the business is reduced from the $5,000,000 we originally used in Blog #41 to the $3,971,542 noted on Page 6, a $1,000,000+ reduction caused if George dies this year.  If he lives, the valuation remains at $5,000,000 as authenticated by the InsMark Business Valuator and described in Blog #41.

The easy solution is to indemnify the business against the loss of George by having the business purchase $1,000,000 of life insurance on him.  The evaluation should also take into account that George needs to replace his income for Marie’s benefit.  One way to meet the cash needs of the business and the income needs of Marie is to have the firm own a life insurance policy on George large enough where $1,000,000 of the death benefit offsets the reduced value of the firm due to George’s death, and the balance is used to fund a salary continuation benefit for Marie.

Is there a way to coordinate those two goals with, let’s say, $2,000,000 of coverage?  What kind?  Term insurance for five years?  Is there a place for a permanent policy?

The best way involves the personal purchase of permanent life insurance, and it works regardless of the structure of the business: C Corporation, S Corporation, Limited Liability Company (“LLC”), or Partnership.  (George’s firm is an LLC.)

Alternate Key Executive Insurance Technique

Following are the steps for implementing this arrangement:

  1. George purchases the life insurance policy personally with Marie as beneficiary.  The face amount of the policy is $2,000,000, $1,000,000 of which reflects the loss to the firm should he die prior to the sale of the business.
  1. If George dies prior to the sale of the business, Marie collects the life insurance proceeds, and although the LLC has lost $1,000,000 in valuation through the death of George (as documented by the InsMark Business Valuator), Marie has the $1,000,000 of the life insurance in a tax free life insurance death benefit to offset the loss.

    Should the LLC need the $1,000,000 to continue business operations, Marie can loan it to the LLC at a fair market rate of interest giving her the cash flow of the loan interest.  The loan would be repaid when the LLC is sold.

  1. George and Marie have personal access to the policy’s loan values for tax free cash flow during retirement years.

Below is a graphic of the $2,000,000 policy.  It is a max-funded Indexed Universal Life policy with five premiums of $184,000.  Click here to review the Illustration of Values of the policy from the InsMark Illustration System.

max funded indexed universal life policy graph image

“Wow”, you may say, “this could be an impossible sale!” And it may well be impossible if you expect George and Marie to cough up the $184,000 out of their personal income.

Where else are the funds coming from to purchase the policy?  We integrated the policy’s costs and benefits into the Wealthy and Wise analysis developed in Blog #41: If We Sell Our Business, Can We Afford to Retire? to determine if the premium cost can be absorbed by George and Marie’s assets with the after tax loans scheduled from the policy to apply on their retirement cash flow needs.  The goal is not to invade their net worth too much to do this.

Good news!  The procedure not only doesn’t degrade net worth; it improves it long-range by almost $1.7 million as you can see in the graphic below.

blog 42 net worth after providing required cash flow graph image

Note:  Participating loans of $100,000 a year from the Indexed UL for retirement cash flow begin in year 11 and are reflected in the graphic.

Strategy 3 (from Blog #41):  Sell the business in 5 years; retire on $440,000 after tax cash flow plus a 3.00% cost of living adjustment.

Strategy 4:  Same as Strategy 3 plus acquire $2,000,000 of personally-owned indexed UL paid for from assets.

So who says life insurance is expensive?  In this case, it costs almost $1.7 million if George and Marie don’t buy it. On top of that, it provides substantial death benefits as well.

There is no other planning software that can accomplish the analysis in Blogs #41 and #42 other than the combination of the InsMark Business Valuator (powered by BizEquity) and Wealthy and Wise.

Click here if you would like to review the Wealthy and Wise reports comparing Strategy 3 with Strategy 4.

 

InsMark’s Digital Workbook Files

If you would like some help creating customized versions of the presentations in this Blog for your clients, watch the video below on how to download and use InsMark’s Digital Workbook Files.

Digital Workbook Files For This Blog

Blog42ip

Download all workbook files for all blogs

Note:  If you are viewing this on a cell phone or tablet, the downloaded Workbook file won’t launch in your InsMark System.  Please forward the Workbook where you can launch it on your PC where your InsMark System(s) are installed.

 

Please understand that Strategy 3 in this Workbook is replicated from Blog #41 with Strategy #4 added.  With Strategy 4, the $184,000 premiums for the life insurance are entered on the Desired Cash Flow tab in years 1 - 5.  The $100,000 expected policy loan proceeds are entered on the Expected Cash Flow tab in years 11 - 30, and the cash value and death benefit of the policy are entered in all years on the “Other Assets” tab.  This scheduling directs Wealthy and Wise to find the money for the policy premium from George and Marie’s assets, and the powerful cash value and participating loan features of Indexed Universal Life more than offset the assets used to pay for the policy.

Next week in Blog #43, we will examine a dynamic new way that the business can induce Tom Hamilton, who is a key, non-shareholder, Executive Vice President and General Manager, to remain with the firm during these next critical years while the plans to sell the business are firming up.

For information about the InsMark Business Valuator (powered by BizEquity) or licensing information regarding Wealthy and Wise and the InsMark Illustration System, contact Julie Nayeri at julien@insmark.com or 888-InsMark (467-6275).  Institutional inquiries should be directed to David Grant, Senior Vice President - Sales, at dag@insmark.com or 925-543-0513.

Documents On A Disk imageDocumentation for the Alternate Key Executive Insurance Technique is available in InsMark’s Documents On A Disk™ (Version 21.0 and higher) in the Key Employee Insurance Plans section of specimen documents.  A variation with superb tax results is also provided in that same section in which an irrevocable trust is owner and beneficiary of the life insurance.

InsMark’s Referral Resources

If you would like assistance with an Alternate Key Executive Insurance plan or a Wealthy and Wise evaluation for one of your prospects or clients (or help with illustrations from other InsMark Systems), contact any of the Referral Resources listed below.  They are all highly skilled at running InsMark software and can help you using your choice of insurance company.  You don’t need to be licensed for InsMark software to use their services -- although if you aren’t, we would certainly welcome your participation.  Mention my name when you talk to one of our Referral Resources as they have promised to take special care of my readers.

Testimonials:

"InsMark is the Picasso of the financial services world — their marketing savvy never fails to amaze me."
Doug Peete (Past President, Top of the Table) Overland Park, KS

"Wealthy and Wise has been instrumental in closing three difficult planning cases in the last two years. Total commissions exceeded $100,000.  Without being able to demonstrate adequate retirement cash flow, these cases would not have closed."
Scott Mounger, CLU, ChFC, Mesa, AZ

seperator bar

More Recent Blogs:

Blog #41: If We Sell Our Business, Can We Afford to Retire?  (Part 1 of Valuing the Business)

Blog #40: Leveraged Deferred Compensation

Blog #39: More on the Magic of Indexed Universal Life

Blog #38: Avoiding a $20 Million Mistake

Blog #37: Four Ways to Smite a Termite

3 Reasons Why It’s Profitable For You To Share These
Blog Posts With Your Business Associates and
Professional Study Groups (i.e. “LinkedIn”)

Robert B. Ritter, Jr. Blog Archive