Life insurance protects families and businesses when a loved one passes away. M Financial Group Member Firms are comprised of some of the most successful and experienced professionals in the business. The collective buying power of M Financial allows Member Firms to utilize a more favorable pricing experience than many off-the-shelf products and to garner special service considerations.
Life insurance has many unique characteristics that may make it an appropriate solution for a variety of uses in addition to the death benefit protection. Some of these characteristics include:
- Policy cash values accumulate on a tax-deferred basis.
- Policy death benefits are received income tax-free.
- Policy cash values, in many cases, may be accessed on a tax advantaged basis, therefore, can be used as a supplemental retirement plan not subject to the restrictions of qualified plans. Loans and partial withdrawals will decrease the death benefit and cash value and may be subject to policy limitations and income tax.
- Can allow families to spend down their retirement plans knowing that their legacy to loved ones is taken care of.
- May provide tax-favored income for children’s education.
Often mistakenly viewed as a price-only decision, the long-term nature of life insurance necessitates careful consideration in the selection of the insurance carrier, the product type, and the agent or agency, and their interaction with heirs. Some of the questions to consider in purchase include:
- Does the agent have a business succession plan that provides for continued service after the retirement or death of the original agent?
- Does the agent have sufficient experience to meet your needs adequately?
- Does the agent have any influence with the carrier selected?
- Is the insurance carrier financially sound?
- Does the carrier have a history of equitable treatment of existing policyholders?
- Will the service levels provided by the carrier satisfy your requirements?
- Will the product be able to adapt to changes in your personal and financial goals or situation?
- Are the pricing assumptions of the product economically sound?
- If a term purchase, what products are available if conversion occurs? Are these products comparable to the current marketplace?
Estate Planning and Wealth Transfer
Proper estate planning better supports the current and future financial possibilities for you and your family, allows you to transfer your wealth according to your wishes, and can help reduce unnecessary taxes and expenses.
We are committed to working with you and your family to help determine your long-term personal financial goals and plan accordingly. In addition, we will structure your estate assets to help minimize tax liabilities and maximize value to future generations. Our professional team will work with any additional advisors you may have, such as an attorney or accountant, to develop and implement a plan of action. All of this planning will be coordinated with your insurance contracts in order to provide a sound, workable plan. Periodically, we will review your plan with you in order to assess our progress in accomplishing your long-term objectives.
Ultimately, our goal is to assure that you and your family have taken prudent steps to reduce your tax liabilities and to create the most effective means to help finance any future tax liabilities.
At a time when social responsibility has taken on increasing importance, charitable planning offers a strategic way for you to connect to causes that you and your family feel passionate about. Whether your aim is to develop a philanthropic legacy for your family, or simply to support your community, tax-favored aiding programs create ongoing opportunities to transfer family assets to public and/or private charities. These charities often include family foundations that are managed by family members, in which the family retains control over the gifted assets and access to income generated by these assets. Often, charitable planning provides a balance to estate and life insurance plans, while taking on personal meaning for you and your family, like our involvement with The University of Tampa. We offer creative solutions aimed to achieve your personal or familial philanthropic goals without interrupting your family’s long-term financial possibilities.
An important component to any estate plan is gifting, which allows you to reduce the size of your taxable estate by strategically transferring the wealth you have worked so hard to create for your family members. Gifting enables you to take advantage of the substantial tax advantages available through the use of lifetime gifts. Thoughtful use of these gifts through the use of planning vehicles such as trusts and life insurance can help maximize the value created for your heirs. We can help you determine a gifting strategy that is consistent with your planning objectives.
*Please note, this material is intended for informational purposes only and should not be construed as legal or tax advice and is not intended to replace the advice of a qualified attorney or tax advisor.
Ultimately, all business owners must decide in what capacity they want their business to continue, what their own long-term individual contributions will be, the best way to ensure the ongoing care of their clients, and the optimal direction and strategy to execute those objectives. If your business has not yet developed or communicated a plan for business continuation in the event of an unexpected incident or catastrophe (e.g., the unexpected death or disability of an owner or key decision-maker, or a natural disaster), you are missing an opportunity to protect your business from potential devastation.
While financial considerations are often the primary focus, philosophical and emotional considerations that may not be as clear also play a vital role in the approach and design of a succession plan. We will work closely with you and your professional advisors to identify areas of concern and opportunity and provide solutions that help to bring certainty to the future of your business. We design plans intended to help your reputation—with your business identity within your community, among your customers, and within your industry—remain intact in the event of a significant change.
Given the current competitive business environment, we believe that an executive benefits program is essential in recruiting top tier talent who will contribute to your company’s growth and profitability. A well-designed and implemented executive benefits program provides incentives that help attract new executives and retain talent over time.
We design, implement, and administer executive benefit plans that enable you to selectively reward key employees and top executives of your business. Our cost-efficient executive benefit plans supplement qualified retirement and group insurance plans that may be restrictive in nature. Our programs are designed to help meet the personal needs and goals of executives within the context of the overall corporate financial goals of your business.
Employee stock options and programs like 401(k) plans are a good start, but they may not meet the financial expectations of the most talented executives. Our belief is that executive employees want to enjoy a rewarding retirement, by establishing sound financial options early on. We consistently strive to be chosen as trusted corporate advisors for carefully evaluating costs and benefits, while continuously exploring additional possibilities for better programs to help executives achieve their financial goals.
Beyond the 401(k)
For many executives the annual investment limit in a 401(k) plan may be too restrictive. Deferring compensation can be a solution to limitations in traditional qualified plans, such as the 401(k). Nonqualified deferred compensation plans allow deferral of various forms of pay, including base, bonus, commissions, and special incentives, without the cap on the dollar amount saved or contributed. This opportunity may make it easier for executives to pay for other important expenses, such as tuition payments or the purchase of a home.
Including Performance Pay and Incentives in Disability Programs
In an era that has emphasized stock options and bonus compensation, executives may find their performance pay is not part of their current supplemental disability equation. Highly compensated employees usually fall short in plans designed to deliver a percentage of base pay “only” as disability benefits, even if income is tax-free. This is simply because of the disproportionate amount of total compensation arising from incentives, bonuses, stock options, and other forms of contingent compensation. Therefore, supplemental disability plans can be designed to give executives the opportunity to cover these other sources of compensation.
Supplemental Executive Retirement Plans
Supplemental Executive Retirement Plans (SERPs) help solve challenges with retention and motivation, helping retain and reward executives critical to the continuity of your company’s success. SERPs are a viable and popular alternative for top long-term executives concerned about the concentration of their post-retirement wealth in stock options. Although not without risks, a SERP may permit executives to self-direct the return on their account balances.
Our Commitment To In-Force Management
M Financial believes that performance and cost should be measured over the life of an insurance product, not with an initial illustration or the first year premium. This commitment to In-Force management may be M Financial’s most powerful differentiating characteristic. M Financial is unique in the industry in both philosophy and practice—providing this level of service to clients can be rare.
M Financial’s In-Force Management Principles
- Collaborate with Partner Carriers and align interests and philosophy.
- Segregate M Financial’s unique experience – do not dilute quality with data from non-Member Firm clients.
- Track experience and performance diligently.
- Work with Partner Carriers to pass on improvements in underlying experience to existing clients.
The information above does not relate to the provision of investment advisory services.