Decision Tree Insurance

Category: Business Planning

Better Permanent Life Insurance Rates With Health Issues

infographic showing someone who received a higher life insurance price because of their health and learns that another insurer may offer a better rate after reviewing the full medical history.

You applied for permanent life insurance, and the offer came back rated. Maybe your agent used a letter — Table D. Maybe a number — Table 4. Either way, the message was the same: because of your health, you’re going to pay more than someone in perfect shape. Most people accept that as the final […]

Getting a Policy Out of a Qualified Plan: Swap-Out vs. Distribution

Stick figure business owner comparing swap-out, distribution, and surrender options for removing a life insurance policy from a qualified retirement plan.

If a qualified plan is holding a life insurance policy on your life, that policy has a deadline the plan documents rarely spell out in plain language: it has to leave the plan before your distributions begin. Not necessarily surrendered — but resolved, one way or another, on a schedule the IRS sets rather than […]

Section 162 vs. Pretax For Purchasing Life Insurance: Which Funds Your Plan?

Stick figure business owner comparing Section 162, pretax rollover money, and plan contributions as three ways to fund life insurance for a business owner.

Article #57 — Section 162 vs. Pretax (Preview) The short answer: A business bonusing itself money to buy a policy (Section 162) and a business redirecting old retirement money to buy a policy (the pretax route) get lumped together in search, but they’re opposite mechanisms — new money taxed now versus old money still deferred. […]

Roll Over an Old 401(k) Into Life Insurance Without Paying Tax First

Stick figure self-employed business owner rolling old 401(k) or traditional IRA money into a Solo 401(k) that can buy permanent life insurance inside the plan.

The short answer: Old 401(k) or traditional IRA money generally can’t buy life insurance directly, and cashing it out to buy a policy personally means paying ordinary income tax on the withdrawal first. But if you have genuine self-employment income — even a side business alongside a day job — you can roll that old […]

How Life Insurance Fits Inside a Cash Balance Plan

Stick figure business owner reviewing a cash balance plan and learning how limited life insurance inside the plan can help protect the retirement promise if the participant dies early.

Cash balance plans have a name problem, and it’s worth clearing up before anything else. “Cash balance.” It sounds like there’s an account with your name on it, holding actual dollars, waiting for you. There isn’t. It’s a hypothetical bookkeeping entry — a number on paper backing a promise, not a pile of dollar bills […]

How Business Owners Buy Life Insurance With Pretax Dollars

Stick figure business owner using pretax retirement plan dollars inside a qualified plan to buy life insurance, with Solo 401(k), cash balance, 401(k), and 412(e)(3) options shown.

Every dollar your business earns gets touched by the tax man at least once — sometimes twice before it ever reaches something you can use. But there’s a way to make him wait years longer than he’d like on money you’re using to protect your family and your business — and on the death benefit […]

What Is BOLI? Bank-Owned Life Insurance Explained

Stick figure whiteboard illustration explaining bank-owned life insurance, showing a bank owning a permanent life insurance policy on key employees to offset benefit costs and strengthen its balance sheet.

If you’ve ever been told that permanent life insurance is a bad investment — overpriced, oversold, something you’d be smarter to skip in favor of a mutual fund — here’s a fact that doesn’t fit that story: the most risk-averse, heavily regulated institutions in the American economy hold billions of dollars of it themselves. I […]

What Is Captive Insurance? A Business Owner’s Guide

Stick figure business owners comparing commercial insurance premiums with a captive insurance company that covers recurring risk, builds reserves, and keeps underwriting profit inside the business.

Most business owners who read this article won’t qualify for what it describes — and that’s exactly the point. A captive insurance company isn’t a product you buy off a shelf. It’s a structure built for businesses with real, recurring risk exposure and the profitability to plan around it. But if your business does qualify, […]

What Is COLI? Corporate-Owned Life Insurance Explained

Stick figure business owner using corporate-owned life insurance to fund a company promise, build cash value, protect the business, and comply with notice and consent rules.

You’ve probably heard the term corporate-owned life insurance somewhere — from an advisor, in a headline about a lawsuit, maybe from your own accountant — and you’re not sure if it’s a legitimate financial tool or something to be suspicious of. That was exactly where Jack started, too. Jack owns a specialty manufacturing company he […]

Does My Employer Have Life Insurance on Me? Your Rights

Stick figure employee reviewing workplace paperwork and asking whether their employer has corporate-owned life insurance on them, with notice and consent rights explained

Maybe it was a headline you half-remembered, a coworker’s offhand comment, or a line you noticed buried in a stack of paperwork you signed years ago and never thought about again. However it got in your head, the question is a hard one to shake once it’s there: does my employer actually have a life […]