Nonqualified Deferred Compensation


A Nonqualified Deferred Compensation plan lets employers help key employees and/or top earners generate benefits using their own salary and bonus income. In exchange for the employee's agreement to defer current compensation, the employer promises to provide benefits sometime in the future.

 

A deferred compensation plan can give employees:

  • Additional retirement income to help plan for a comfortable retirement
  • A survivor benefit to help protect their families' future in the event the employee dies before retirement


As a business owner, a Nonqualified Deferred Compensation plan helps you:

  • Helps you Recruit top management talent. Your new key employees can defer their signing bonus in exchange for future benefits.
  • Helps you Retain key employees. Basing full benefits on vesting schedule or performance requirements can encourage key employees to remain with the company long-term.
  • Allow you to select the participants. You decide which key employees to reward based on their contributions to your company's success.
  • Helps you Reward key employees. Your key employees can defer incentive compensation, or the income they can't defer into the company's 401(k) because of discrimination testing rules.


For your employee, the advantages of a Nonqualified Deferred Compensation plan is: 

  • Gives your key employees the opportunity to invest before-tax dollars to create future income.
  • Helps your key employees lower their current income tax bill.
  • Offers tax-deferral of the growth credited to your key employees' plan contributions.
  • Help your key employees generate additional retirement income.
  • Can provide a significant survivor benefit to your key employees' beneficiaries.
  • Gives key employees recognition for their dedication to your company.


Peak Insurance Agency can help you develop your Nonqualified Deferred Compensation package today to keep you competitive in your industry's recruitment.

 

Buy-Sell Planning Using Life Insurance


Have you thought about what would happen if one of the owners of your business were to die unexpectedly or become disabled? Where would you find the funds to buy out his or her share of the business? Utilizing a Cross Purchase arrangement can help fund this buyout.

In a Cross Purchase arrangement, business owners agree among themselves to collectively purchase the interest of any owner who dies or becomes disabled. Using life insurance policies to fund the buyout, each business owner purchases a life insurance policy on all the other owners. At the death of an owner, the surviving owners receive the policy proceeds and then purchase a pro rata share of the deceased owner's business interest from his or her estate. The result is that the estate's non-liquid business interest is converted into cash and the surviving owners now own 100 percent of the business.   

Group Life Insurance


Group Term Life Insurance helps you protect your employees and their families at a minimal coast to you. Group Term Life Insurance can be based on salary multiples, flat amounts, incremental amounts, or employee class. Peak Insurance Agency can help you design a plan with standard and optional features that fits your company's needs. Group Life Insurance can easily add to your employee benefits package.

Key Person Insurance


Look at your business and think about who is irreplaceable in the short term. Is it your bookkeeper, your sales manager, your field supervisor? If this key individual is gone, the business can come to a stand still. The purpose of Key Person Insurance is to help the company survive the blow of losing the person who makes the business work.

 

With Key Person Insurance, a company purchases a life insurance policy on its key employee(s), pays the premiums and is also the beneficiary of the policy. If that person unexpectedly dies, the company receives the policy death benefit. The company can use the insurance proceeds for expenses until it can find a replacement person, train a replacement, or, if necessary, pay off debts, distribute money to investors, pay severance to employees and close the business down in an orderly manner.  

 

The amount of Key Person Insurance a business needs depends on the business. We can help evaluate your need and shop around for the best policy that is fit for your business.

As a business owner, you are an expert on your business. You are not an expert on insurance products and what types are best for your needs. Peak Insurance Agency is here to be your expert. From Group Life Insurance to Buy-Sell Agreements and all products in between, Peak Insurance Agency can shop for the best insurance products for you and from the best carrier. Contact us today to know what type of insurance products can benefit you and your business.

 

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A business has many insurance needs. Peak Insurance Agency can guide you through all of them. Contact us today for a face to face conversation about your business in efforts to protect your business and grow your business.