Life insurance is often a critical component in business succession, estate planning, buy-sell agreements, key executive compensation programs and more. It is the engine that makes the planning work and in turn saves business owners substantial dollars in lieu of self-funding various exposures.
Unfortunately, life insurance has consistently proven to be a misunderstood asset with very little due diligence given to its acquisition and implementation.
It is a common misunderstanding that life insurance death benefits are always "tax free." Nothing could be further from the truth as multiple tax traps surround life insurance structuring that can cause policy death benefits to be both income and estate taxable.
RSG has implemented insurance portfolios for its clients that range from $1 million to over $300 million. Our experience has revealed that it is not uncommon for even the most successful business owners to have only a rudimentary understanding of their life insurance portfolio. A major role we play is educating business owners as well as their trustees and CFOs about their policies and tax structure.
Improper life insurance planning not only affects the life insurance's intended objectives but can have a negative chain reaction that impacts the rest of their business succession and estate planning. Life insurance must work in concert with legal documents, valuations and other planning components for optimum results.
The proper acquisition of life insurance can be an important part of the overall success of planning, whether it be business succession, estate planning, charitable planning, and more. RSG evaluates whether having insurance will be an asset or a detriment to the plan. When life insurance will enhance the value of planning it is imperative that a comprehensive assessment is made of the alternatives available. Over the years, RSG has developed an in-depth due diligence process of all aspects of life insurance planning.
Our firm is not affiliated with any one carrier. Being independent allows our clients to receive the highest quality policies from the strongest companies in the marketplace. Our process includes a thorough review of the financial strength of potential carriers (studying independent rating services, Comdex Score, company history and more), as well as the appropriate design and ownership structure of the policies implemented to assure maximum tax benefit, growth and results.