By now, most know that Principal’s BOES platform is available to all CBS Advisors. What may not be apparent is how to use it to win cases and grow your practice. Whether front end resources like training and fact finders or largely misunderstood elements like Principal’s administrative capabilities, these tools need to be fully understood in order to be deployed effectively. Let’s face it, unless you have taken the time to research and understand this platform, you don’t know BOES.


The Sale

Low unemployment and more and more professionals “job hopping” means that attracting and retaining talented employees is more challenging than ever.  While not a smoking gun type of solution, a non-qualified bonus plan combined with the balance of a robust benefits package can be a difference maker. These plans are popular because they provide a simple, yet effective, way to help businesses meet their retention goals. In addition to being an effective tool to recruit reward and retain key employees bonus plans are also an effective strategy for business owners looking to save additional income for retirement on a tax advantaged basis. 

Although these plans can be designed to uniquely fit each business client’s specific need, you don’t have to be the expert!  You have access to the BOES Advanced Solutions Team, at The Principal®, to help design each unique plan – whether it is funded with employer contributions, employee after-tax compensation, or a combination of both. 

Tax Planning

As business owners and key employees prepare for retirement, they realize much of their retirement income will be taxable. Bonus plans from the Principal Financial Group® offer a number of different options for the timing and characterization of income taxes that may minimize the amount of income subject to tax at retirement.  Follow this link for more on the Need for Tax Diversification.

The Process

A life insurance policy is purchased using bonuses received from the employer or existing compensation.  Upon distribution, the key employee uses the life insurance cash values to supplement retirement income and/or provide survivor benefits to his or her heirs.

PRN Bonus

 

The Client

In this sale, the client is likely the employer rather than the insured. To that end, ideal prospects have the following attributes:

  • Any business entity (S corporation, C corporation, partnership, LLC, etc.)
  • Employers who want to retain and reward key employees
  • Employers who want a current tax deduction on any contributions to the plan
  • Employers who would like to avoid ERISA requirements while still providing a valuable benefit to certain employees

The Fact Finder and Plan Design

The initial part of the process, Plan Design, is incredibly straightforward when using The Principal®’s BOES experts. It all starts with a Request for Proposal, and leads to the following outputs:

The Product

Whether your clients are looking for fixed or variable products, the Principal Financial Group has an “all seasons” product portfolio with a solution for any type of Bonus Plan sale.  

The Underwriting

  • Have a willing buyer? Use Accelerated Underwriting to get the case through quickly for face amounts of $1MM or less.
  • What about multi-life underwriting?  The Principal® offers Guaranteed Issue and Simplified Issue as well as other competitive underwriting programs.

The Administration

No matter what life insurance product is best for your client, there is always a need for effective reporting and administrative services with any business case. Learn from the pros at Principal why their no-cost business administrative services platform is a critical part of working in this market space.  Remember to share with your clients, why they should leave the administrative services details” to The Principal®

The Training and Resources

While there is a ton of information in this post, there is much, much more to the Executive Bonus story, from The Principal®.  See below for more training resources on Executive Bonus Plus and the BOES Platform: