A Short Lesson on Whole Life & Term Life Insurance

When faced with the wide range of life insurance coverage available, you may wonder what type fits your needs now and what coverage you should consider for future needs. A good first step is to look at two basic types of insurance coverage: whole life and term life. Whole Life Insurance—Cash Value for Your Dollar Whole life insurance helps to provide not only security from financial hardship in the case of a death, but also a cash value component of the policy. Under a cash value life insurance policy, premium payments cover the cost of pure insurance coverage first, including the expenses and mortality factors of the insurance company; the insurance company then accumulates “leftover” dollars to build the cash value of the policy. In addition to cash value buildup in the policy, some insurance companies may provide whole life insurance policyholders with dividend payments—due to lower expenses, lower mortality …

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Nonqualified Plans – Baiting the Benefit Hook

Attracting and retaining qualified employees and managers is always a challenge for companies of all sizes. Most employers realize competitive salaries are not the only things desired by the best workers. Sought-after employees also expect compensation packages to include valued benefits. A qualified retirement plan is a traditional component of many employee benefit packages. As a business owner, you’re likely to appreciate the advantages: Your contributions are tax-deductible and accumulate on a tax-deferred basis. However, these plans can be difficult to administer and contain many regulations restricting employee eligibility, participation, vesting, and employee contributions. What’s the alternative? Nonqualified plans offer the flexibility to selectively choose whom you’ll cover and how much you’ll contribute for each individual. Many companies use them to supplement or replace their qualified plans. Although there is a wide range of nonqualified plans from which to choose, executive bonus plans and deferred compensation plans are among the …

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