Business Insurance

Buy Sell Insurance

Every privately held company should have a well-structured Buy Sell Agreement to protect the interests of the owners, partners, and/or shareholders. This Agreement can ensure the orderly transition of the business’ interests if an owner or partner passes away, becomes sick or disabled. In these situations, the simplest and most-cost effective method for buying out a partner or co-owner is often through insurance.Â

Our company has considerable experience in reviewing Buy/Sell Agreements, and ensuring the necessary life, critical illness, and disability insurance coverage is in place to fund the buyout of a partner / owner.Â

Business Overhead Insurance

Like most companies, your business depends on your ability to generate sufficient revenue to pay the regular operating costs.  If you were to have an extended absence due to a long or short-term disability, there would be a considerable impact to the company’s bottom line.

Business Overhead Expense insurance is designed to help businesses pay ongoing fixed expenses—such as salaries, rent, property taxes and utilities— if an owner/partner becomes disabled and is unable to work. 

Key Person Insurance

Key executives in your company have spent considerable time and effort in acquiring the knowledge, experience, reputation, and relationships that make them so valuable to your organization. The death of such a key member of the management team could result in a serious disruption to your operation and have a severe financial impact. In the absence of proper planning, the very survival of the business may be affected by the death of a key executive.Â

A solution is for the business to purchase an insurance policy on the life of these key executives. In the event of death, the life insurance proceeds provide the business with needed working capital to meet immediate cash needs and to provide a source of funds for finding, attracting, hiring, and training a replacement for the deceased executive. Key Person coverage helps to assure creditors, employees, and potentially large investors that the business will continue notwithstanding the death of the key person. The value of these benefits will usually far exceed the cost of the life insurance.

Enhanced Executive Benefits

In today’s complex and hyper-competitive environment, your high performing executives are your company’s greatest asset and are critical to the growth and success of your organization. While traditional employee group benefits provide a solid foundation for a personal risk management plan, these benefits often contain limits on coverage that may be inadequate for high income earners.Â

We specialize in developing customized benefits programs that take into account the specific needs of the executive team. Our unique Executive Benefits Programs are designed to provide personalized and portable benefits for the executive team; enhanced contract definitions and coverage terms; and improved premium stability and long-term cost controls for the company. As part of these programs, we would normally offer elements of the following benefits:

  • Life Insurance
  • Disability Insurance
  • Critical Illness Insurance
  • Access to US Health Care
  • Supplemental Pension Plans

Supplemental Executive Retirement Plans

Thomas O’Neill & Associates Inc. specializes in the area of supplemental executive pension plans. With our comprehensive pension consulting services, we address the special needs of the executive team, bridging the gap between retirement benefits provided under statutory plans and their retirement income requirements.

A Supplemental Executive Retirement Plan (SERP) can be a particularly valuable incentive, enabling employers to attract top industry talent to their organization. A SERP acts as a long-term financial reward, providing an excellent retention device for those individuals that have been instrumental in the growth and success of the company. However, proper care should be taken in creating these programs.

Corporate Estate Transfer

If you are one of the privileged Canadians, you have spent your life working very hard to accumulate significant wealth within your privately held corporation. Yet at some point you may realize that you will not need to spend everything that you have accumulated, and those assets are not needed for active business activities.   At that time, you will want to consider how to maximize the amount that will be transferred to the next generation. This is where a Corporate Estate Transfer strategy can help.Â

Corporations and holding companies often own cash and investment assets that aren’t used in daily business activities. These assets, which are locked within the corporation are taxed at the highest corporate tax rate and can usually only be paid to the individual shareholders of the corporation as a taxable distributions (unless there is an opportunity to elect a capital dividend).Â

The Corporate Estate Transfer strategy provides business owners with a cost effective alternative for preserving capital while living and enhances estate value upon death. By using some or all of passive corporate assets to fund a permanent life insurance policy, business owners can take advantage of the tax-advantaged growth within an exempt life insurance policy to enhance their net estate value. The transferring of passive assets from a taxable to a tax-advantaged environment will minimize annual taxes.

On the death of the shareholder, the corporation will receive the death benefit tax-free. The insurance payment in excess of the Adjusted Cost Basis (ACB) is credited to the Capital Dividend Account (CDA) and the private corporation may distribute a tax free dividend to the surviving shareholders or shareholder’s estate.