An idea for your next Keyman Policy

Stephanie Paoletta Advanced Planning, Business Planning, Case Study, Cincinnati Life, Financial Planning, Insurance Company, Life Insurance, Term Life Insurance, Uncategorized 0 Comments

 

Are you a business owner? Have you thought about what would happen if you lost a key employee due to death?

Cincinnati Life Insurance Company can provide personal guidance about business continuity planning using Termsetter ROP. Your clients receive funds to offset costs related to a key employee’s death or a refund of their paid base premiums (excluding rider and substandard premiums) when that key employee survives the policy term.

Case Study

Company: Reybright Consulting

Employees: 50

CEO: John Keyperson, 43 years old

John’s Role: leadership, company operations, management of client and bank relationships, revenue generation.

Risks: If John, CEO of Reybright Consulting for seven years, were to die unexpectedly, Reybright would need to:

  • Hire an experienced, knowledgeable employee to take over John’s responsibilities.
  • Reassure clients of Reybright’s business continuity.
  • Contact creditors to establish a relationship with a new Reybright contact.
  • Minimize any disruption in sales and revenue.

Recommendation: Reybright purchases a Termsetter ROP policy from Cincinnati Life

  • Face amount = $1 million, 10 times John’s annual compensation of $100,000
  • Coverage – payment to Reybright through death benefit or through return of premium feature.
  • Options at end of term – Reybright could choose:
    • Reduced paid-up policy.
    • Return of all paid base premiums.
    • Conversion to a permanent policy.
    • Transfer the policy to John as compensation for his service.

 

 

 

 

 

 

 

 

Click here to learn more about Cincinnati’s Termsetter ROP

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