Advantages to employers:

• Provides Needed Protection: A key person's illness or injury can derail the business or professional practice. Reducing this risk is simply a good business decision.
• Involves Low-Cost Outlay: By funding the plan with insurance, the employer can provide a valuable benefit for just pennies on the dollar in many situations without excessive loss of cash flow.
• Experiences Tax-Favored Savings: Corporations can deduct premiums paid as a necessary business expense, which can result in even more tax savings.
• Allows for Selective Participation: A non-qualified benefit, these plans feature selective participation and are allowed to "discriminate" in favor of highly-paid employees.
• Eliminates Ambiguity: Coverage is clearly disclosed to eliminate arbitrary treatment of employees.
• Involves Easy Implementation: All it takes is drawing up the plan agreement and applying for the insurance. No legal or government approval is required.
• Provides Recruiting Incentives: This is useful in attracting qualified employees.
• Increases Productivity: It demonstrates employer trust and esteem, promotes increased loyalty and generally has a positive impact on performance.
• Improves Retention: "Golden handcuffs" provide added incentive, loyalty, and job security for selected key employees.