By Brad Collins, NYLife
If you have employees, you know that the loss of a key employee can have a profound impact on business operations. When an employee leaves, customers may worry about receiving their goods or services in a timely manner; suppliers may be concerned about getting paid for their deliveries; and staff morale can also take a dip as they worry about assuming a heavier workload.
That’s why it’s important to make sure your business is prepared to deal with the unexpected departure of a key employee which usually happens for one of three reasons: resignation, the they become disabled, or they pass away.
While life insurance cannot protect against employees choosing to leave, it is often used as a tool to help incentivize them to stay; deferred compensation plans are powerful vehicles for doing just this. Deferred compensation arrangements allow you to provide retirement income to select employees. The way it works is that you and the selected employee enter a contract that specifies the compensation you will pay out to him or her in the future. The future of your business depends on attracting and retaining the right talent with the right tools.
It’s also important to protect your business against economic losses it may face as the result of a top employee’s death with the use of key person insurance. The way it works is the business becomes the owner and beneficiary of a life insurance policy covering the key employee. If the insured employee dies, the business receives the policy proceeds.
Deferred compensation and key employee insurance are benefits that are related exclusively to your top employees, but New York Life also has options that you can offer your entire team to help cultivate a rewarding work environment. These benefits provide employees and their family’s peace of mind and added financial security.
Having a contingency in place will allow you to focus on making the best possible decisions for the future.
This article is provided by Brad Collins, Agent, New York Life Insurance Company. He can be reached at 903-601-5060