Attracting & Retaining Key Employees: Life Insurance

In today’s highly competitive marketplace, attracting and retaining top talent is a key to building a successful business. These in-demand individuals are looking for incentives above and beyond the standard benefits packages to join and remain loyal to your enterprise.

What is it?

Employee incentives provide business owners an opportunity to offer a select group of key employees' retirement and survivor benefits beyond what is provided as part of the company's standard benefits offering. These incentives can make the difference between keeping and losing employees who are critical to your business' success.

How is it used?

Life insurance, when used as part of an employee incentive plan, can provide a death benefit payable to a beneficiary in the event of the employee's death. In addition, depending on the type of life insurance used, the employee may be able to draw upon the cash value through loans or partial surrenders from the life insurance policy to help supplement his or her retirement.1 Even with some insurance policies, there's no guarantee the cash value will be there, or sufficient to supplement their income. While the policy may allow for access to the cash value in the short-term, such as through loans or partial surrenders, these transactions will impact the policy's death benefit if the values are not restored prior to the insured's death. You should know that there may be little to no cash value available for loans in the policy's early years.

What are the benefits?

The simplicity of utilizing life insurance in a plan, the potential income tax deduction for the business and the degree of control that the business owner gives to the employee all combines to make life insurance an attractive employee incentive option.

What are the different types of life insurance products and solutions that can help in attracting and retaining key employees?

Executive Group Life Insurance
Executive Group Life Insurance is employer-sponsored group life insurance designed with the specific needs of executives and other senior professionals in mind.

The EGL Advantage for Employers 

Executive group life insurance enables employers to gain a competitive edge via the benefits provided to their executives and senior professionals. Advantages of an EGL program include:

- Enhanced Benefits: provides life insurance benefit amounts that are better aligned with the needs of these key individuals, and also offers them a new and valuable tax-deferred accumulation vehicle which can help fund "living benefits1."
- Benefit Program Cost Optimization: enables employers to deliver enhanced benefits to executives and senior professionals while simultaneously helping to control overall benefit costs.
- Flexibility: gives employers wide flexibility in establishing life insurance benefit amounts for their executives and senior professionals.
- Talent Recruitment and Retention: adds valuable, permanent insurance coverage to a firm's executive benefit suite, thereby helping the organization to more effectively compete for talent in the marketplace.


The EGL Advantage for Participants


Executive group life insurance also provides enhanced benefits for individuals including:

- High Insurance Coverage Amounts: helps satisfy the higher income protection needs of executives and senior professionals by providing benefit levels that are usually higher than those available through the Group Term Life insurance plans offered by many employers.
- Tax-deferred Accumulation Opportunity: gives key staff an effective, additional accumulation vehicle to help fund "living benefits1" such as post-retirement healthcare by building policy account value in a tax-deferred manner and offering withdrawals tax-free up to the policy cost basis.
- Portability: allows continuation of coverage after individuals leave the firm, giving them the opportunity to retain their Executive Group Life insurance -- and all of the benefits associated with it -- for the long-term. Costs for portable certificates may be higher than those for active employees.
- Flexibility: offers covered individuals additional flexibility to help ensure this valuable insurance evolves with their changing needs. EGL participants may borrow or withdraw accumulated cash values from their policy, providing them with another accessible source of funds. Furthermore, in contrast to many individual insurance policies, EGL participants incur no charges for surrendering their policy after leaving their employer 



Universal Life
Universal life insurance provides lifetime death benefit protection along with flexibility that gives your employees choices as their needs and finances change. It offers options such as coverage amounts that may be increased or decreased, and premiums that can vary based on individual finances. Universal Life is for those who value the lifetime protection that permanent life insurance provides, universal life offers a viable option. Flexibility in premium and coverage amounts is an important feature of universal life insurance

Universal Life may be a good choice when you’re looking for permanent life insurance coverage to protect your family or business against financial loss from premature death. As a universal life policy owner, you can control and change many features of your policy - it’s a product that easily adapts to changes in your life.

Some universal life policies offer a secondary guarantee, meaning the policy will not lapse if certain conditions are met. Depending on the premium you choose to pay, a universal life policy may accumulate tax-deferred cash value, which you may access as a benefit while you are living. You may borrow from the policy to supplement your retirement income, provide funds for a child’s college education or any purpose you choose – an important financial safety net should you need it. If cash is taken as a living benefit, the policy’s death benefit is then reduced by any outstanding loan and interest.* 

Universal life insurance provides you with death benefit protection along with options and features to meet your changing needs. It’s life insurance for your lifetime


Whole Life
Whole life insurance provides protection for a lifetime. It offers guarantees that you can’t find in other forms of life insurance, including guaranteed premiums that will not increase, a guaranteed death benefit and guaranteed cash value growth providing the premiums are paid on time and meet all requirements. For many of our policyholders, whole life insurance is at the heart of their financial strategy, providing not only for those left behind, but the flexibility to meet a variety of financial needs throughout their lives.

When you decide to make whole life insurance part of your overall financial strategy, you are helping to protect your family’s long-term financial security at your death. That’s because the death benefit your beneficiaries receive can help pay expenses at an extremely difficult time.

Whole life insurance also allows you to borrow* against the cash value of the policy while you are alive – often referred to as “living benefits.” A whole life insurance policy’s cash value, which accumulates on a tax-deferred basis, can provide an important financial safety net should you need it. Cash can be borrowed from the policy for any purpose, such as supplemental retirement income, education funding, business expenses or emergencies.

Whole life is the only life insurance that offers a guaranteed death benefit, guaranteed cash value and guaranteed premiums that will never increase as long as the premiums are paid. It’s a versatile product that can meet a variety of protection needs.

If you prefer to speak to someone about attracting and retaining key employees for your business call 866-866-2960