3 ideas to become a hero to business-owner clients

LAS VEGAS - Providing life insurance solutions to business owners is one way advisors can elevate their practices.

Andrew Rinn, assistant vice president of advanced sales strategy at Sammons Financial Group, outlined several ideas to help business-owner clients during Protectors 2026.

Opportunity awaits those who want to serve business owners, Rinn said. He shared some statistics showing that 73% of privately held business owners plan to transition ownership over the next decade. That represents $14 trillion of net worth transferred. But 70% of business transitions fail or never go to market.

Rinn shared three ideas for advisors to share with business-owner clients:

1. Executive bonus arrangements and restricted executive bonus arrangements, or REBAs
2. Split dollar arrangements
3. Buy/sell arrangements

Executive bonus arrangement

“If you have a key employee and want to keep it simple, executive bonus is the way,” Rinn said. It’s a way to give a benefit to a key employee that the employer doesn’t want to offer to everyone else in the company.

An executive bonus arrangement allows an employer to pay the premiums on a life insurance policy owned by a key employee. The premium payments are generally treated as taxable compensation to the employee and potentially deductible compensation to the employer, while the employee owns the policy and controls its benefits.

Restricted executive bonus arrangement

A REBA allows an employer to fund an executive-owned life insurance policy while temporarily restricting the executive's ability to access its cash value or exercise certain other ownership rights. The restrictions typically lapse after the executive satisfies specified employment or retention requirements.

Split dollar

A business split-dollar arrangement allows an employer and an employee or owner to share the costs and benefits of a life insurance policy. The agreement specifies each party's rights to the policy's cash value and death benefit and often gives the employer the right to recover the premiums or other amounts it contributed.

Rinn described two types of split-dollar arrangements:

1. Endorsement split-dollar. In an endorsement split-dollar arrangement, the employer owns and typically funds a life insurance policy on a key employee, while endorsing a specified portion of the policy's death benefit to the employee's beneficiary. The employee is generally taxed annually on the value of the life insurance protection provided, while the employer retains ownership and control of the policy.
2. Loan split-dollar. In a loan split-dollar arrangement, an employer advances funds to pay premiums on a life insurance policy owned by an executive or another party. The premium advances are treated as loans, typically secured by the policy, and the employer retains the right to repayment.

Split-dollar arrangements can also serve as a business transition tool, an alternative to nonqualified deferred compensation, or a C Corporation owner retirement strategy, Rinn said.

Buy-sell techniques

Rinn described three buy-sell techniques, all of which use life insurance to fund them.

1. Entity purchase. An entity-purchase buy-sell arrangement is a succession agreement under which a business agrees to purchase an owner's interest upon death or another specified event. When funded with life insurance, the business owns policies on the participating owners and uses the death proceeds to help finance the purchase of a deceased owner's interest.
2. Cross purchase. A cross-purchase buy-sell arrangement is a business succession agreement under which the surviving owners purchase the ownership interest of an owner who dies or experiences another specified triggering event. When funded with life insurance, the owners typically hold policies on one another and use the death proceeds to finance the purchase of a deceased owner's interest.
3. Traditional buy-sell for a limited liability company. A traditional LLC buy-sell arrangement is an agreement among the limited liability company and its members that establishes how a member's ownership interest will be transferred following death or another specified event. When the agreement is funded with life insurance, the LLC or the surviving members can use the insurance proceeds to purchase the departing member's interest, providing liquidity to the member or the member's estate while allowing the business to continue under the remaining owners.

 © Entire contents copyright 2026 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.

Susan Rupe is editor in chief, magazine, for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at susan.rupe@innfeedback.com.