Business planning
Solutions that protect business owners and their employees
Most business owners have their wealth tied up in the company. SRS helps advisors design and place the coverage that keeps the business running, funds ownership transitions and rewards the people who drive it.
Our carrier partners
60+ top-rated carriers
The market knowledge to know which one fits your client.
In short: life insurance is often the most efficient way to fund a business plan. It can replace a key person, buy out a departing or deceased owner, reward and retain executives, and create liquidity for succession, usually for pennies on the dollar compared with self-funding.
Protect the business
Key person
Key person insurance is owned by the business on the life of an owner or employee whose loss would hurt profits. The death benefit helps cover lost revenue, recruiting and training costs, and reassures lenders and customers.
- Coverage is typically justified as a multiple of the person’s compensation or their measurable contribution to profits.
- Employer-owned policies need IRS notice-and-consent before issue to keep the death benefit income-tax free.
- Key person disability coverage protects the business while the person is alive but unable to work.
Fund the agreement
Buy-sell
A buy-sell agreement sets the terms for buying out an owner who dies, becomes disabled or leaves. Life and disability buy-out insurance make sure the money is there when the agreement is triggered.
- Cross-purchase plans have owners insure each other; entity (redemption) plans have the business own the policies.
- After the 2024 Supreme Court decision in Connelly, entity-owned proceeds can increase the company’s value for estate tax purposes, so plan structure matters.
- Watch transfer-for-value rules when policies change hands.
Guides and case studies
Reward and retain
Executive compensation strategies
Life insurance can fund benefits that attract and keep the people a business depends on, often with tax advantages for the company, the executive or both.
- Section 162 executive bonus: the business pays the premium as a deductible bonus and the executive owns the policy.
- Restricted (REBA) bonus plans add a vesting schedule, the “golden handcuffs.”
- Split dollar, nonqualified deferred compensation and SERPs suit more selective or larger arrangements.
Guides and case studies
Plan the transition
Succession planning
Many owners have no written plan for who takes over, or how they will be paid. Succession planning sets the path to family members, partners or key employees, and insurance makes it affordable.
- Start the conversation early; reluctant owners are often the biggest obstacle.
- Fund the transfer with a buy-sell, a one-way buy-out for sole owners, or an estate plan that treats active and inactive heirs fairly.
Know the number
Business valuation
The value of the business drives the buy-sell price, the amount of coverage owners can buy and how carriers underwrite large cases. A current valuation keeps everyone on the same page.
- Informal valuation methods can get a plan started; formal appraisals are best for large or contested situations.
- Carriers use valuation and financial statements to justify face amounts.
Recent case results
Business cases we have placed
Key person disability
High-limit key person disability coverage for a hedge fund CEO.
Read the case →Key person justification
Justifying key person coverage beyond the usual multiple of compensation.
Read the case →Case results describe past placements and are not a guarantee of future offers.
Who you’ll work with
Tim Fuller
President, SRS Inc. · Littleton, Colorado
SRS has helped advisors place life, disability, long-term care and annuity cases for more than 50 years, with a focus on impaired risk underwriting and advanced planning. When you send a case, you work directly with our team, not a call center.
Get help with a case
Two ways to start
Advisors get case design, illustrations and underwriting help, including financial justification for large face amounts. Business owners can talk directly with Tim Fuller.
For advisors
Send us your case
Tell us about the business, the owners and what you are trying to solve. We will help design the plan, justify the coverage and shop the underwriting.
Need numbers now? Submit a life quote request or call 303-309-3471.
For business owners
Talk to Tim
Want to protect your business, your partners or your key people? Tim will walk you through the options. No cost, no pressure.
Or call 303-309-3471
FAQ
Business planning questions
What is key person insurance?
Life insurance owned by a business on an owner or employee whose death would hurt the company. The business pays the premium and receives the death benefit to replace lost profits and cover the cost of finding a replacement.
How is a buy-sell agreement funded?
Most often with life insurance, plus disability buy-out coverage. In a cross-purchase plan the owners own policies on each other; in an entity plan the business owns them. The right structure depends on the number of owners, taxes and the Connelly decision.
What is a Section 162 executive bonus plan?
The business pays the premium on a policy owned by the executive and deducts it as compensation. The executive pays income tax on the bonus and owns the cash value and death benefit.
How much life insurance can a business owner buy?
Carriers look at the owner’s share of the business value, income and the purpose of the coverage. SRS helps assemble the financial justification so large cases get approved.
This page is general information for financial professionals, not tax or legal advice. Tax treatment depends on individual facts; clients should consult their tax and legal advisors. Reviewed by Tim Fuller, President of SRS Inc.
See also: Life insurance · Business planning · Advanced planning · Personal planning · Impaired risk underwriting