Several business purposes may be served by a salary continuation plan funded with disability income insurance.
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.
- 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.
- 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.
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