Terry Bork CLU ChFC, President   |   Aurum Insurance Services   |   D: 440-605-7230   |   C: 440-666-6032   |   tbork@auruminsurance.com   |   www.auruminsurance.com


A major law firm with 200 Partners wanted to provide an additional tax favored retirement option exclusively for the benefit of their Equity and Income Partners. The solution was a firm sponsored Insurance Based Retirement Plan, offering Partners the opportunity to acquire an institutionally priced Accumulation Designed Life Insurance policy.  The policy offered a unique combination of tax advantaged benefits not available with any other financial instrument or cash accumulation strategy.  Each policy was custom engineered to Partner specifications, to provide an additional tax favored option to save for retirement, based on each Partner’s needs.

Leveraging The Firm's Buying Power

Firm sponsorship of the plan provided Partners access to an institutionally priced policy, with features typically not available to individuals. The potential benefits included: 

  • Lower policy expense charges
  • Enhanced liquidity options
  • No medical exams

Contributions To The Plan

Unlimited after-tax premium contributions, a flat dollar amount, or percentage of compensation, could be made into the plan via payroll deduction.  Contributions from existing capital could also be made.  Within prescribed government guidelines, a majority of the premium went toward building policy cash value.

The Unique Benefits Provided By Policy Cash Value

The policies were designed to eliminate income taxes on cash value growth and all distributions made from the policy.  Growth of policy cash value was determined by a hedging strategy allowing Partners to participate in market gains, while being protected against market losses.

The policies were designed to allow Partners access to policy cash value during lifetime on a tax free basis, without age restrictions, to meet various financial objectives, including providing a stream of tax free cash flow in retirement.  In addition,  policy cash value was not subject to the claims of creditors in most states where Partners resided.

The Policy Death Benefit

While most policies were designed for minimum death benefits to maximize cash value, they still provided substantial death benefit protection in addition to policy cash value.  Some policies were designed to allow Partners to receive a tax free advance on the policy death benefit while living, to fund Long Term Care expenses.

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