Helping Business Owners

Attract and Retain Key Employees — Without Giving Up Equity

Retaining key people through meaningful incentives can be challenging, especially if you are not willing or able to part with equity. With our nonqualified deferred compensation programs, you can:

  • Provide future non-equity compensation to the most important people on your team.
  • Base achievement of the benefits upon completion of agreed-upon performance milestones.
  • Increase the value of your business by increasing retention of your most valuable employees.

Case Study

Retire on your terms while rewarding and retaining key people.

Situation: Two brothers in their late 50s own a thriving development business but weren’t sure as to the exit strategy…….


Action Steps:

Two brothers successfully buy out a real estate development company from their deceased father’s spouse many years ago by creating and funding a special trust with life insurance.  The brothers, who are now in their late 50s, do not have children who are interested or able to take over the business. The owners liked the idea of eventually rewarding the people who helped make the company a success. There were key people spread out among the company’s many divisions, several of whom served as property managers for assets in other cities. 

Based on the existing benefit package and the cash on hand for surety bonding, Cory determined that all employees could be insured under a guaranteed issue whole life policy for $50,000, $75,000, and $100,000 increments. This not only enhanced the return on cash values to over 3% without disturbing the surety bond, but it also gave the employees a death benefit that grows annually and can be paid to the employee’s beneficiary or the company. 

Most importantly, since the policies have cash value, if the owners decide to exit and take retirement income via an Employee Stock Option Plan (ESOP), the company will already have a funded mechanism in place to repurchase shares of retiring employees through the policies’ cash values rather than having to disrupt future cash flow.


The owners were relieved to know that they had options for retirement and felt good that they were rewarding employees who were crucial to the success of the business. The employees were incentivized to stay and perform so they could eventually earn ownership, and a solid financial foundation to fund the repurchase liabilities was established with the life insurance to protect cash flow.

Protect your business with key-person life insurance

If you, a co-owner, or a key employee retires, passes away, or becomes disabled, the financial impact to your business, the surviving owners, and the employees could be significant. We can help you gain peace of mind by designing, implementing, and funding a custom program that will protect your business against this financial risk, and help preserve the business for the next generation.

Case study

Retiring and perpetuating the business to key employees.

Situation: A contractor was reaching the twilight of his career and wanted to explore selling his company to his key employees within a seven-to-ten year period……


Action Steps:

The company was profitable and had retained earnings. The owner wanted to maximize his profits, have flexibility and provide an opportunity for others who helped grow the company to be successful.  Cory’s recommendation included a specially-designed life insurance contract paid over a four year period on the lives of his key employees. When the owner decides it is time to retire, the company can take tax-free loans from the policy and bonus the money out to the key employees, who will in turn give the money to the owner in exchange for company stock. If any of the employees leave prior to vesting of the benefit, the values in the life insurance remain with the company. In addition to providing a buyout mechanism, there is key man coverage on all key employees from inception to vesting.


The client is delighted that he can move ahead with the transition of his business to key people. Confident he can retire on his own terms, with company assets earmarked to provide him and his wife retirement income for as long as they live.

Coordinate business succession and estate planning

Having your estate plan in order is not only critical to ensuring your wishes are met after you’re gone but also to preserving peace and harmony among your heirs. If your business interests account for a sizable portion of your wealth, then it is even more important for you to coordinate your business succession plan with your estate plan. Without this coordination, the competing interests of the business, its remaining owners and employees, your family members, and the I.R.S. will likely lead to a result you did not anticipate or desire.

Case Study

Perpetuating the business while treating children fairly.

Situation: A couple in Chicago was concerned about the perpetuation of their commercial real estate business they spent so much time building together…….


There are now 35 employees, including their son who has worked in the business for 20 years and is serving as CFO. They also have a daughter who has three kids and is married to a dentist in Maryland.  

The couple wanted to treat each child equally, but they were concerned about what would happen to the real estate portfolio if it had to be split, and about the potential of it creating disagreements among their two children.

The couple’s estate planning attorney brought in Cory to design a life insurance policy that will provide the immediate cash needed to equalize the heirs’ inheritances without having to sell or encumber the real estate. 

It also fit hand-in-glove with the company’s established legal framework and could also be used to help mitigate potential estate tax liability.

The client is thrilled that they will be able to preserve their commercial real estate portfolio for the next generation and not create a financial situation that could lead to the deterioration of relations between their kids when they are no longer there to intervene.

“For five generations my family has invested in real estate in Southern California and throughout the southwest. Beginning in 2004, Cory Grant has helped design a succession plan and put together a portfolio of life insurance that will ensure that no one has to make an untimely sale of assets. There are members of the family with significant health issues and Cory’s ability to negotiate directly with the carriers at a high level was crucial in obtaining best pricing and keeping the insurance portfolio current. It is unique to find an advisor that thinks like an entrepreneur.”

Terry Lingenfelder – Solana Beach, CA

Call: 1-800-423-4890