Industry Report

How a Single Policy Can Benefit Your Business in 3 Ways

by Jeff Kunkel, EA Chair

Federated Insurance and the Electrical Association have a decades-long successful relationship. We continue to work together to offer a wide range of risk management services and support. Keep reading to learn about their life insurance benefits...

Losing quality employees is a business risk that can be managed. In fact, a single business-owned life insurance policy can form the core of a plan to retain your most prized assets: your people. Here are three ways a life insurance policy can help mitigate the risk associated with losing valuable team members:

  • In the event of a key employee’s death, a life insurance policy can provide funds to cover the costs associated with recruiting, hiring, and training a qualified replacement. The proceeds can also be used for business continuation or overhead expenses.
  • A private bonus plan, funded with the cash value of the life insurance policy, gives employees an incentive to stay with your business. You can design a private bonus program that pays select employees set bonuses in specific years. As the business owner, you decide when and what amount of bonus should be given. The build-up of cash value inside of the life insurance policy funds the bonus payments.
  • A life insurance policy can also provide personal protection for the employee’s family. With the right documentation, the death benefit on the policy used for the bonuses is split between the business and a personal beneficiary. This personal protection may give the insured’s family additional financial support and security at a difficult time.

Life insurance can help proactively give employees an incentive to stay committed to your business, and peace of mind knowing your business is better protected should you lose a key team member. Contact your Federated® marketing representative for more information:

This article is for general information and risk prevention only and should not be considered an offer of insurance or legal, financial, tax or other expert advice. The recommendations herein may help reduce, but are not guaranteed to eliminate, any or all losses. The information herein may be subject to, and is not a substitute for, any laws or regulations that may apply. This information is current as February 2023 and is subject to change. Some of the services referenced herein are provided by third parties wholly independent of Federated. Federated provides access to these services with the understanding that neither Federated nor its employees provide legal or other expert advice. All products and services not available in all states. Qualified counsel should be sought with questions specific to your circumstances. All rights reserved.