Executive Benefits
Our solutions are flexible and tailored to each company, helping strengthen both employees and the organization’s future.
Buy-sell agreements
A buy-sell agreement is a legally binding contract that outlines what will happen to a business owner's or partner's share of the business if they die, become disabled, or retire.
- It ensures a smooth succession or transition of the business.
- It can be funded by insurance, such as life, disability, or critical illness, to provide the necessary cash for the remaining partners to buy out the departing partner's shares
Key person insurance
Also known as key person or key employee insurance, this policy protects a business from the financial loss that would occur if a critical employee, owner, or partner were to die or become disabled.
- The insurance proceeds help the company cover financial losses, recruit a successor, and keep the business running smoothly.
Executive Disability Insurance
Executive disability insurance is a customized form of income replacement protection designed specifically for high-income earners like senior executives. Unlike a standard group disability plan that may cap benefits, this specialized insurance aims to fully protect a high salary and any performance-based compensation, such as bonuses.
Why executive disability insurance is necessary
- Insufficient group coverage: Many standard group disability plans offered by employers have benefit limits that fail to adequately cover an executive's high salary.
- No coverage for bonuses: Regular group plans typically only cover an executive's base salary, leaving significant bonuses, commissions, and other incentives unprotected.
- Complex financial responsibilities: Executives often have substantial financial responsibilities, such as mortgages, children's education funds, and complex investment portfolios, which standard plans would be insufficient to protect in the event of a disability.
Executive Critical Illness
Executive critical illness (CI) insurance is a specialized benefit for senior executives and high-value employees. It provides a tax-free, lump-sum payment upon diagnosis of a covered serious illness, such as a heart attack, stroke, or cancer. Unlike group disability insurance that replaces income, CI insurance helps manage the significant, often unexpected, costs that accompany a major illness.
Why executives need specialized critical illness coverage
- Financial stability: A large, one-time payout provides financial flexibility. The executive can use the funds to cover costs not covered by provincial health care, such as out-of-country treatment, medication, or home-care services.
- Lifestyle protection: The payout can cover substantial financial commitments, like large mortgages, allowing the executive to focus on recovery without dipping into retirement savings or other investment portfolios.
- Benefit portability: Individual executive CI policies are guaranteed renewable and portable. This means the executive can keep the coverage throughout their career, even if they change employers, and into retirement.
- Enhanced coverage: Unlike some group plans with limited coverage, individual executive plans are often underwritten and may include a broader range of covered conditions.
- Return of premium (ROP) options: Some executive plans offer an ROP rider. If the executive does not experience a critical illness during the policy term, they can receive a tax-free refund of their premiums.
Life Insurance
Executive life insurance is a specialized benefit for senior executives and high-value employees. It provides more robust coverage than standard group plans and can be used for sophisticated financial and estate planning, often with significant tax advantages.
Why executives need specialized life insurance
- Higher coverage: Benefits can be significantly higher, reaching multi-million dollar coverage to protect a large and complex estate.
- Estate tax liability: The tax-free death benefit provides liquidity to cover estate tax liabilities, probate fees, and other expenses, helping to preserve the value of the estate for heirs.
- Protection for non-liquid assets: It ensures that non-liquid assets, such as a business or cottage, do not need to be sold to cover estate expenses.
- Portability: Many executive plans are individually owned, meaning the executive can take the policy with them if they leave the company.
Tax-efficient strategies using life insurance
Corporate-owned life insurance (COLI)
- Funding with corporate dollars: Premiums are paid by the company using after-tax corporate dollars, which are often taxed at a lower rate than personal income.
- Tax-free death benefit: The death benefit is paid tax-free to the corporation, creating a credit in the company's Capital Dividend Account (CDA).
- Tax-free dividend: The company can then pay out a tax-free capital dividend from the CDA to the executive's estate or beneficiaries.
- Tax-deferred growth: A permanent COLI policy can build a cash value that grows on a tax-deferred basis, which can be accessed for business needs.
Long Term Care
Executive long-term care (LTC) insurance is a specialized benefit for senior executives and high-net-worth individuals. It provides a tax-free financial benefit to cover the substantial costs of long-term care services, which are typically not fully covered by government or standard group health plans. This type of coverage is crucial for preserving wealth and maintaining control over care decisions for executives and their families.
Why executives need specialized long-term care coverage
- Protection of assets: Long-term care costs can quickly deplete personal savings and retirement funds. A specialized policy protects an executive's estate from being eroded by care expenses, allowing them to preserve their legacy for their family.
- Supplementing provincial coverage: While provincial healthcare plans cover some care costs, they often have limits on the types and duration of coverage. An executive LTC policy supplements these benefits, providing more financial security and flexibility.
- Greater control and choice: The benefit payout gives executives the financial freedom to choose their preferred care setting, whether it's at home, in an assisted living facility, or a high-end private nursing home.
- Higher-end care options: An executive-level policy can secure access to a higher quality of care and more specialized services than what might be available through standard programs.