As a business owner, you work hard to build your future and plan your retirement. But today we live in uncertain times. For most adults, planning for retirement can feel (or be) very daunting – requiring years of pre-planning, complex strategizing and avoiding procrastination. Many people are aware that life insurance can guarantee the protection of your loved ones, but they don’t realize it can also supplement retirement savings.

Permanent life insurance carries “living” benefits. Your policy earns cash value that accumulates tax-deferred. This means you do not pay taxes on any of the accumulation within the policy. Additionally, you can access that money generally tax free through policy loans. This cash value can be used to fund college expenses, a small business loan, or any other anticipated need, like retirement funding.

In addition to life insurance benefits building a strong retirement, they also build a strong employee base. Good business owners know that key employees are the foundation of a successful business. They are business owners, CFOs, directors, or any other individuals who are a source of leadership and profitability. These people are difficult to replace. The death or disability of a key employee would be devastating to the financial wellbeing of any company.

The Solution: Key Employee Protection

Finding a plan to protect your key individuals can give your business the additional funds it needs to 1) hire and train replacements; 2) replace an employee’s contributions to profits; 3) meet loan obligations if the key employee was also a guarantor on a business loan; 4) maintain the confidence of clients and creditors.

Purchasing life insurance and/or disability insurance for your employees can be a cost-effective way to safeguard your business. Funding with insurance is easy to administer, benefits are available as soon as the day after coverage begins, and although the premiums are not tax deductible, the life insurance proceeds at death are generally income tax-free to the business.

Life insurance is not only important for your key employees, but all of your employees. You depend on their knowledge, experience, talent and loyalty to keep your company running smoothly and efficiently. But, like many businesses, you may have been hit hard by the recession or maybe you are just getting started. Either way you’re trying to keep expenses down – making cuts, freezing payrolls and streamlining operational cost – meaning your employees may be assuming heavier workloads, longer hours and broader responsibilities, often for the same paycheck.

So, in these tough economic times, how can you show your workers just how much they are appreciated? Consider supplementing the group of benefits that is referred to as “employee benefits” with life insurance through a voluntary payroll deduction program.

Voluntary payroll deduction is one of the simplest ways employees can purchase permanent life insurance to protect themselves and their loved ones. This is a smart way to supplement the benefits you already offer them. Setting up life insurance deductions with existing payroll deduction practices is usually a simple process and there is virtually no direct, out-of-pocket cost to the employer.

Life insurance is a smart investment towards retirement, employee retention and financial protection. Remember, when you invest in your employees, you invest in your business. That’s just good business sense.

Holly Ann Kearnes
New York Life, Agent

Holly Ann Kearnes is a New York Life Agent serving St. Joseph, Mo. As a native of St. Joseph, Holly aspires to grow and prosper our community by building up stronger families, and helping our businesses succeed. To contact her, please call (816) 205-6468.