Terry Bork CLU ChFC, President   |   Aurum Insurance Services   |   D: 440-605-7230   |   C: 440-666-6032   |   tbork@auruminsurance.com   |   www.auruminsurance.com

Company Owned Life Insurance

Companies own life insurance for several important reasons:

  • Protection against the loss of a key employee
  • To fund an entity redemption buy-sell agreement
  • To fund non-qualified deferred compensation agreements

In each case, the company owns a policy insuring the life of a key employee and names itself as beneficiary.

Upon death of the key employee, the business receives the death benefit and uses it for the established business purpose.

Question—what type of insurance to use?

You have a choice as to the type of insurance to use.  In many cases, especially in the case of key employee protection and stock redemption, the choice is TERM INSURANCE.

Term insurance is an expense that grows over time and negatively impacts company earnings.

In Search of Yield

In addition, many companies need to maintain significant working capital and seek a higher return, consistent with their risk policy, than is currently available in the market.

Accumulation Designed Life Insurance (ADLI) can provide a unique solution.

One Policy - Two Solutions

  • Reposition a portion of your company's working capital into ADLI
  • Replace any term insurance on the lives of key executives with ADLI
  • The cash surrender value of the policy or policies is liquid and is booked as an asset
  • Interest crediting can be determined using a fixed account or Equity Indexing, improving financial performance and increasing company earnings

The end result—Death Benefit Protection and Improved Company Performance.

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