Executive Compensation
Some benefits your company can provide better than you can yourself.
  • Enhanced Levels of Coverage
  • Key Person Insurance
  • Buy-Sell Insurance Agreements
  • Corporate Insured Retirement Strategy

Enhanced Levels of Coverage

Creating a class within your benefits plan for Executives allows the top members in your firm to receive the highest levels of coverage possible. 100% health and dental coverage, larger Life Insurance and Critical Illness Benefits. Longer Disability durations, and the tax savings afforded by Medical Reimbursement Plans.

Key Person Insurance
Key Person

Employees are the greatest asset a business has, and all businesses have key individuals without which there would be no business.

Key Persons can be anyone from the Owner and partners, executives, a key service or sales person or anyone else that the business heavily depends on. 

If a Key Person were to die or become unable to perform their duties due to illness or disability the business will suffer a loss. This loss can come in the form of lower sales, increased overhead or loss of goodwill. Protecting your business against these potentially catastrophic losses is where Key Person Insurance provides a solution.

Key Person Life Insurance

If a Key Person were to die, the business would receive a tax free lump sum to aide in surviving that troubling time. Benefits are paid tax free into the corporation and can be used to cover expenses, hire replacement employees, pay down debts, or even paid out of the company to remaining shareholders as a tax free capital dividend.

Key Person Critical Illness Insurance

If a Key person is diagnosed with a critical illness such as suffering from a heart attack or Cancer, that employee may not be able to contribute to the company. Critical Illness Insurance is designed to help aide in the recovery of a critical illness by removing any financial obstacles. The company would receive the critical illness benefit and could use the fund to pay business expenses, hire replacement employees, or pay for the ill employees medical expenses. Critical Illness Insurance can also be set up as Grouped CI, when two or more key individuals are insured. In this grouped arrangement insurance premiums are deductible to the business, and benefits are paid TAX FREE!

Key Person Disability

If a Key Person becomes disabled, they are unable to contribute to the company, and may become a burden on the company in the form of salary or benefits payments. Key Person Disability Insurance, provides the Key Person with an Income while they are off work, freeing up capital inside the business for other uses. Key Person Disability Insurance provides income where group disability policies do not, namely dividend and non-T4 income.

Disability Buy-Out Insurance

If a Key Person is also a shareholder, their disability can greatly effect the profitability of a business as they are not able to contribute to the revenue of the business, however, they can still receive dividend payments from the business indefinitely. In the case of a prolonged disability, the remaining shareholders may wish to purchase the disabled persons shares in the business. Rather than taking a bank loan; which may be difficult with a disabled shareholder, or using personal assets to purchase the shares, a Disability Buyout Policy, would provide a one time lump sum benefit payable to the company to fund the purchase of the disabled shareholders shares.

Buy-Sell Life Insurance

In the event of an unexpected death of a shareholder, the deceased ownership transfers automatically to their spouse. often when this occurs, the spouse has little or no interest in running or being involved in the company. However, as a shareholder, the spouse is entitled to their share of any dividend payments or company profits. The surviving shareholders will likely wish to purchase the deceased shares to regain full control of the company.

Going to a bank and asking for a loan. The bank will see the company as a risk as it just lost a key person, and may either decline to provide financing, or charge a higher interest rate to offset its added risk.

Using personal assets at the time of death to purchase the deceased shares. You could mortgage your home or other assets to obtain the funds needed to purchases the shares from the deceased spouse.

Start a savings plan today to fund a share purchase at some unknown price, at some unknown date, with some unknown amount of savings.

Purchase Key Person Life Insurance for pennies on the dollar, use the tax free death benefit equal to the fair market value of the shares to regain full control of the company. [More Information]

[+] More Information

Buy Sell Agreements - An Overview of Funding with Life Insurance (PDF)
A Guide to General Insurance Provisions in Buy-Sell Agreements (PDF)

Corporate Redemption Method (PDF)
Cris-cross Purchase Method (PDF)
Promissory Note Method (PDF)

Corporate Insured Retirement Strategy

Your company offers a great tax shelter for your earnings while you are working, however, one of the great challenges as you near retirement is how to get your money out of your company with the least amount of tax payable.

Company profits can be invested inside a Universal Life Insurance policy , which provides additional tax sheltering and creditor protection. When you reach retirement you can either withdraw money from your company and pay a hefty tax bill or you can leverage your life insurance policy and avoid taxation almost entirely.

Corporate Insured Retirement Strategy (PDF)


HMR Employee Benefits Ltd. 670 Newport Ave - Victoria , BC V8S 5C7 PHONE: (250) 592-4614 - TOLL FREE: 1-888-592-4614 Fax: (250) 592-4953 - EMAIL:
© Copyright RealWeb Enterprises Ltd.all rights reserved.