Ensuring the financial security of business owners, partners, executives, professionals and/or key employees is critical to the long-term growth and sustainability of any organization.
There are several reasons:
• Compensation packages need to be competitive in order to attract and retain the best talent
• The unexpected removal of a key person due to sudden illness or death creates an immediate skill gap that can lead to uncertainty among staff, customers and other key stakeholders including lenders and suppliers
• The turnover of key people, whether due to termination, retirement or the unexpected, is a closely-watched event. Proper planning helps to minimize the disruption and ensure a seamless transition
We work closely with organizations to understand the unique needs of their key people, then guide them in the creation and implementation of the appropriate benefits package. Common solutions include IPPs, key person disability and critical illness coverage, health benefits for executives working abroad and specialty insurance products for hard-to insure individuals.
There are four kinds of insurance to consider for key individuals: life insurance, disability insurance, critical illness, and long-term care.
Life insurance is to protect the people closest to you if you die unexpectedly. The kind of coverage you need will depend on your lifestyle, your family’s needs and your business plans. It’s important to get the right coverage in place now, before something unexpected happens.
The chance of becoming disabled before age 65 is only one in three.* You want to make sure you have disability insurance so that you can receive a regular income during the time you’re disabled. Disability insurance has many options. You can receive coverage for almost any occupation. There is short-term and long-term disability insurance protection, and a number of other features. You need to make sure you get the right advice and make informed decisions about what your needs might be if you become disabled.
Critical illness protection means being prepared for the possibility of a life threatening illness, a heart attack, a stroke, cancer or a variety of other illnesses. It gives you the means to protect your lifestyle if you suffer an injury or are diagnosed with an illness that’s covered by the plan.
We may be living longer but the key is to maintain some independence and dignity. Long-term care insurance covers you when you can no longer take care of yourself. It gives you daily benefits so you can receive proper care, and can cover the cost if you’re moved to a long-term care facility.
* 1985 Commissioner’s Individual Disability Table A.
We specialize in two areas of investment planning for key individuals:
• individual pension plans
• retirement compensation arrangements
Individual pension plans
Individual pension plans provide tax sheltering for entrepreneurs and executives, among others, at funding levels that are significantly higher than standard RRSP limits. These plans are most appropriate for people who earn a high level of income, to support a more aggressive tax-deferral arrangement.
Retirement compensation arrangements
Retirement compensation arrangements (RCAs) provide additional pension benefits to owners, managers and key employees or members of your management team. RCAs are a way to attract and retain high salaried people because:
• RCAs have higher contribution limits than registered plans
• contributions are tax-deductible for the employer and are not taxed to the employee until the money is withdrawn. The tax rate is usually lower because RCAs typically pay out during retirement years compared to tax rates that would apply if this money was paid out as salary or bonuses.
• the funds are secure because they’re invested with a custodian who holds the funds in trust until the money is withdrawn.