February 2022 - Page 2 of 2

Business Disability Solutions: Key Person Replacement, Business Loan Protection, and Health Benefit Riders

September 25, 2026February 9, 2022 by Tim Fuller

Professional working confidently at her desk, representing disability income protection

Business owners protect buildings, equipment, and inventory. Fewer protect against the disability of the people who keep the business running, or the loans that depend on the owner’s ability to work. These three solutions fill those gaps.

Key takeaways

Key person replacement insurance pays the business if a key employee becomes totally disabled.
A business loan protection rider on overhead expense coverage can reimburse business loan payments during the owner’s disability.
A supplemental health benefit rider can pay a lump sum for cancer, stroke, or bypass surgery while disabled.

If the owner can’t work, the business loan still comes due. A business loan protection rider can cover it.

Key person replacement insurance

Provides funds to the business when a key employee becomes totally disabled. The employer decides how to use benefits, commonly for recruiting and training a replacement, temporary staff, or offsetting lost revenue. See key person disability for business owners.

Business loan protection rider

Added to an overhead expense policy, this rider reimburses the business owner for covered loan payments during a total disability. Covered loans can include buying a practice or business, equipment, buildings or land, expansion, renovations, or working capital. More on business overhead expense coverage.

Supplemental health benefit rider

At one carrier, a no-cost rider pays a one-time lump sum equal to six times the policy’s maximum monthly benefit (including any Social Insurance Substitute benefit) if the insured is disabled under the policy and has coronary artery bypass surgery, cancer, or a stroke.

Availability

These solutions are offered by only a few carriers and aren’t available in every state. Product details change, so contact us for current availability before presenting them.

Frequently asked questions

What is key person replacement insurance?

Disability coverage that pays a business if a key employee becomes totally disabled, to help cover recruiting, training, temporary help, or lost revenue.

What does a business loan protection rider cover?

Business loan payments, such as for a practice purchase, equipment, or expansion, while the owner is totally disabled.

Is business loan protection available in every state?

No. It’s offered by a few carriers and isn’t available in all states.

50+ Years in Business60+ Top-Rated Carriers★★★★★ Rated by Advisors

Reviewed by Tim Fuller on 2026-09-25

Tim Fuller

President, SRS Inc.

Tim leads SRS Inc., a full-service IMO (Independent Marketing Organization) and BGA (Brokerage General Agency), connecting independent financial professionals with life, annuity, disability income, and long-term care solutions from 60+ carrier partners.

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Section 162 Executive Bonus: Single vs. Double Bonus Explained

September 25, 2026February 8, 2022 by Tim Fuller

Advisor and client reviewing an advanced markets estate planning strategy in a private office

A Section 162 executive bonus plan is one of the simplest ways for an employer to reward key employees with life insurance. The biggest source of confusion is how the employee’s tax is handled. Here’s how single and double bonus methods work — and a cleaner way to present the plan.

Key takeaways

In a 162 bonus plan, the employer pays the premium, deducts it as compensation, and reports it as income on the employee’s W-2.
Under a single bonus, the employee owes tax out of pocket; under a double bonus, the employer grosses up the bonus to cover that tax.
Starting from the employer’s budget and working backward to the coverage avoids sticker shock for both parties.

When explained and implemented correctly, the employee receives the benefit with no out-of-pocket tax at the end of the year.

How a 162 executive bonus plan works

The employer agrees to pay the premium on a life insurance policy owned by a selected employee. The employer deducts the payment as reasonable compensation and reports it as taxable income on the employee’s W-2. The employee owns the policy, names the beneficiary and keeps the coverage and cash value.

It’s simple to set up and administer, which is why it’s so popular with closely held businesses.

Single bonus: simple, but with a tax surprise

With a single bonus, the employer pays only the premium. The employee then owes income tax on that amount — out of pocket — for what is effectively a non-cash benefit.

Even with proper warning, that tax bill can take the luster off the plan when the employee files their return.

Double bonus: covering the employee’s tax

With a double bonus, the employer “grosses up” the bonus so the total covers both the premium and the anticipated tax. The employee receives the coverage with no out-of-pocket cost.

The catch: when an employer hears this explained after agreeing to a premium amount, it can feel like the plan suddenly costs more than expected.

A better way to present it: start with the budget

Instead of leading with single versus double bonus, focus on how much the employer is willing to commit. Then work backward: set aside the portion needed for withholding, and design the coverage around the after-tax premium.

The employer sends the premium to the carrier and withholds the remainder. The employer stays within budget, and the employee gets the benefit with no year-end tax surprise. The bonus is still taxable, but it feels tax-neutral to the employee.

If the after-tax premium doesn’t buy enough coverage for the employee’s full need, remember the policy belongs to the employee. It can be designed for the total need, with the employee paying additional premium personally, by direct payment or payroll deduction if the employer agrees. For related planning on valuing key employees, see our article on key person coverage and sweat equity.

Frequently asked questions

What is the difference between a single and double bonus?

With a single bonus, the employer pays only the premium and the employee pays the income tax on it. With a double bonus, the employer increases the bonus to cover the employee’s tax as well.

Is a 162 executive bonus deductible for the employer?

Generally yes, as compensation, provided total compensation is reasonable. Bonuses to business owners of pass-through entities raise different issues, so confirm treatment with a tax advisor.

Who owns the policy in a 162 bonus plan?

The employee owns the policy, names the beneficiary and controls the cash value, unless the plan adds a restrictive endorsement or vesting arrangement.

50+ Years in Business60+ Top-Rated Carriers★★★★★ Rated by Advisors

Reviewed by Tim Fuller on 2026-09-25

Tim Fuller

President, SRS Inc.

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Life Insurance Underwriting for Diabetes: Type 1, Type 2, and Pre-Diabetes

September 25, 2026February 4, 2022 by Tim Fuller

Diabetes is one of the most common impairments on a life application, and one of the most misunderstood. A diagnosis alone rarely decides the offer. How well it’s controlled, how long the client has had it, and whether there are complications decide it.

Key takeaways

Type 2 diabetes with good control and no complications may qualify for Standard rates.
Type 1 diabetes is usually table-rated, but best-case clients over age 50 may see ratings as favorable as Table 2.
Pre-diabetes and gestational diabetes history may qualify for Standard Plus, and A1C history is the single most important document in the file.

With good control and no complications, a Type 2 diabetic may qualify for Standard rates — not the automatic table rating many advisors expect.

What underwriters look at

Underwriters build a picture of long-term control, not a single snapshot. The main factors are:

Type of diabetes and age at diagnosis.
A1C history, the average blood sugar over roughly three months, both at diagnosis and over time.
Complications, including neuropathy (nerve damage), kidney disease, retinopathy, stroke, and cardiovascular disease.
Treatment, whether diet, oral medication, or insulin, and how consistently the client follows up with their doctor.
Other risk factors, such as build, blood pressure, cholesterol, and tobacco use.

The four types, and how each is viewed

Type 2 is the most common form. The body is resistant to insulin and can’t use it effectively. Type 1 is an autoimmune condition where the body produces little or no insulin, usually diagnosed early in life; latent autoimmune diabetes in adults (LADA) is a slower-progressing form. Pre-diabetes, also called impaired fasting glucose or impaired glucose tolerance, means glucose is above normal but below the diabetes threshold. Gestational diabetes occurs during pregnancy and usually resolves after delivery, though it raises the chance of Type 2 later.

Typical underwriting outcomes

Type 2: may qualify for Standard with good control and no complications.
Type 1: best case around Table 2 for clients over age 50; higher table ratings are common at younger ages, depending on control and complications.
Pre-diabetes and gestational diabetes: may qualify for Standard Plus, and in some cases better. See how one client with a borderline blood sugar reading reached Super Standard Non-Tobacco.

These are illustrative ranges. Carriers differ widely on diabetes, so the same file can produce very different offers depending on where it goes.

How to prepare a diabetes case

Gather the client’s recent A1C results (several readings over time are better than one), a full medication list, and any eye, kidney, or cardiac screening results. Then let our Underwriting Team pre-screen the case informally before you apply, so it goes first to the carrier most likely to give the best offer.

Frequently asked questions

Can a Type 1 diabetic get life insurance?

Yes. Type 1 diabetes is usually table-rated, but clients with good control and no complications can get coverage, and best-case clients over 50 may see ratings around Table 2.

What A1C do life insurance underwriters want to see?

Carriers set their own thresholds, but the closer A1C readings are to normal and the more stable they are over time, the better the offer. Send us the client’s history and we’ll tell you which carriers are most favorable for it.

Does gestational diabetes affect life insurance rates?

Usually only modestly. A history of gestational diabetes that resolved after pregnancy may qualify for Standard Plus or better, depending on the carrier and current blood sugar results.

50+ Years in Business60+ Top-Rated Carriers★★★★★ Rated by Advisors

Reviewed by Tim Fuller on 2026-09-25

Tim Fuller

President, SRS Inc.

Connect on LinkedIn →

Why Tax Season Is a Great Time to Talk About Long-Term Care

September 25, 2026February 3, 2022 by Tim Fuller

Every spring, clients sit down with their finances whether they want to or not. That makes tax season one of the easiest times of year to bring up long-term care.

Key takeaways

Clients are already reviewing their financial picture at tax time, so gaps are easier to see.
Premiums for tax-qualified LTC policies may be deductible, and many states offer credits or deductions.
Using a tax refund to pay the annual premium can make coverage feel effortless.

Turn the tax refund into the long-term care premium, and the annual payment becomes a non-event.

Clients are already in planning mode

Tax preparation forces clients to look at income, savings, and expenses. It’s a natural moment to ask what would happen to those numbers if they needed care, and whether their plan covers it.

Lead with the tax benefits

Tax-qualified LTC premiums may be deductible as medical expenses up to IRS age-based limits, self-employed clients can often deduct them directly, and many states offer their own deductions or credits. Details are in four ways LTC insurance provides tax advantages.

Use the refund

Suggest that clients put their tax refund toward the annual premium. It turns a new expense into money they weren’t counting on, and makes the purchase easier to commit to each year.

Work with tax professionals

CPAs and tax preparers see clients’ full financial picture every year. Partnering with them to flag clients who could benefit from LTC planning can be a steady referral source.

Frequently asked questions

Are long-term care premiums tax deductible?

Premiums on tax-qualified policies may be deductible as medical expenses, up to age-based IRS limits, and some states offer additional deductions or credits.

When is a good time to talk to clients about long-term care?

Tax season, annual reviews, and life events such as retirement or a parent needing care are natural openings.

Can a tax refund be used to pay LTC premiums?

Yes. Many clients find using their refund makes the annual premium easier to manage.

50+ Years in Business60+ Top-Rated Carriers★★★★★ Rated by Advisors

Reviewed by Tim Fuller on 2026-09-25

Tim Fuller

President, SRS Inc.

Connect on LinkedIn →

Sell the Need Before the Solution: A Disability Income Sales Tip

September 25, 2026February 2, 2022 by Tim Fuller

Advisors often jump straight to the policy before clients understand what’s at stake. The fastest route to a disability sale is to slow down and make sure the need is clear first.

Key takeaways

Start with what the client values most: family, home, plans, and future security.
Three questions frame the need: How would bills be paid? What would change for the family? How would they recover under financial stress?
Clients who understand the consequences need far less convincing about the product.

Few middle-income families could cover their bills for more than a few weeks without a paycheck.

Start with what matters most

Ask what the client values: family, home, financial plans, a secure future. Then help them see what they could lose if they couldn’t work, and acknowledge together that it’s a real problem.

Financial security: how would they pay the bills?

Most middle-income families don’t have savings to cover more than a few weeks without income. Once paychecks stop, bills drain savings and set plans back for years. For these clients, income protection means meeting obligations and protecting the future.

Family: what would change?

A disability changes everything at home. Plans go on hold, routines change, family members take on more, and medical appointments fill the calendar. Clients want to know they can keep life as normal as possible.

Recovery: can they focus on getting well?

Financial worry makes recovery harder. Knowing monthly benefits will keep things on track lets clients focus on getting better.

Then present the solution

Once the need is clear, the product conversation is much easier. For the next step, try three questions that lead to the DI sale.

Frequently asked questions

How do you sell disability insurance?

Start with the client’s values and what they’d lose without income, then present coverage as the way to protect it.

Why do disability sales stall?

Often because the advisor presents the product before the client understands the risk and its consequences.

What is the biggest risk disability insurance protects?

The ability to earn an income, which pays for everything else in a client’s financial plan.

50+ Years in Business60+ Top-Rated Carriers★★★★★ Rated by Advisors

Reviewed by Tim Fuller on 2026-09-25

Tim Fuller

President, SRS Inc.

Connect on LinkedIn →

Life Insurance 101 for Multi-Service Advisors: The Fundamentals in Three Pages

September 25, 2026February 1, 2022 by Tim Fuller

Harvard’s Charles Eliot argued that the essentials of a liberal education could fit on a five-foot shelf. The essentials of life insurance planning fit in far less. If your core practice is investments, P&C or health, here’s the short list of what you need to start helping clients with life coverage confidently.

Key takeaways

Many advisors hesitate to discuss life insurance simply because they’re unsure of the fundamentals — not because the concepts are hard.
Four areas cover most conversations: types of coverage, quick needs calculations, ownership and beneficiary design, and basic income and transfer tax rules.
SRS offers a three-page quick-study and phone-based training to help you and your staff get comfortable fast.

The key is reducing a body of knowledge to its fundamentals — and life insurance planning reduces nicely to just three pages.

Why multi-service advisors hesitate

More advisors than ever serve clients across disciplines. Many would like to help with life insurance but hold back because they feel unsure about the concepts and the general considerations that come with every case. The good news: the fundamentals are compact, and a little structure goes a long way.

The four fundamentals

Types of coverage. Term for temporary needs; permanent coverage — whole life, universal life, indexed and variable UL — for lifelong needs and cash value goals.
Quick needs calculations. Income replacement, debts, education and final expenses. Carriers also use income-multiple guidelines; see our guide to income multiples in life underwriting.
Ownership and beneficiaries. Who owns the policy and who receives the proceeds drives control, creditor exposure and estate inclusion. Mistakes here are common and avoidable — see 10 common life insurance mistakes.
Income and transfer taxes. Death benefits are generally income-tax-free, but may be included in the insured’s estate if the insured holds incidents of ownership.

Get the three-page quick-study

We’ve condensed these fundamentals into a three-page overview covering coverage types, needs calculations, common owner and beneficiary mistakes, and the key income and transfer tax issues. It’s useful for your own review, for training staff, and for CPAs and attorneys who want a clear overview of the topic. Contact us for a copy.

Training that fits your schedule

We can also walk your team through the outline on a simple conference call — no webinar software required. Participants dial in from wherever they are and come away more confident presenting life insurance concepts to clients. And when a case comes in, our team is ready to help with design, quoting and underwriting.

Frequently asked questions

What are the main types of life insurance?

Term insurance covers a set period and suits temporary needs. Permanent insurance — whole life and the universal life family, including indexed and variable UL — is designed to last for life and can build cash value.

How much life insurance does a client need?

Start with income replacement, outstanding debts, education goals and final expenses, less existing assets and coverage. Carriers also cap coverage using income multiples based on age.

Is life insurance taxable?

Death benefits are generally received income-tax-free. However, if the insured owns the policy or holds incidents of ownership, proceeds may be included in the taxable estate.

50+ Years in Business60+ Top-Rated Carriers★★★★★ Rated by Advisors

Reviewed by Tim Fuller on 2026-09-25

Tim Fuller

President, SRS Inc.

Connect on LinkedIn →

Business Disability Solutions: Key Person Replacement, Business Loan Protection, and Health Benefit Riders

Key person replacement insurance

Business loan protection rider

Supplemental health benefit rider

Availability

Frequently asked questions

Tim Fuller

We’re Here to Help

How a 162 executive bonus plan works

Single bonus: simple, but with a tax surprise

Double bonus: covering the employee’s tax

A better way to present it: start with the budget

Frequently asked questions

Tim Fuller

We’re Here to Help

Tim Fuller

We’re Here to Help

Tim Fuller

Tim Fuller

Tim Fuller