Kai-Zen Executive Benefit Plan


There are two concerns for employers today.

  • Recruiting, Retaining, Reward Key Personnel
  • Providing Business Stability when there is key personnel turnover

How do you provide all these benefits and keep your business stable without breaking the bank? By implementing the Kai-Zen Plan.

Most businesses just offer the basic benefits, like health insurance and 401K matching. So what separates you from the rest? See the “For Executives” page for the full range of permanent and meaningful benefits Kai-Zen allows you to offer your key executives.

Business Continuation (Key Man, Buy-Sell, Partner Buyout)

The Kai-Zen Plan is one of the few plans that covers key personnel, whether they leave or die. Most plans today require that someone die while they are employed for the company to recover its costs. This happens only 1% of the time.

Key Executives can leave for a variety of reasons. Partners can become disabled, have a chronic illness or just want to retire – leaving the business to scramble to cover their loss to the business

With the Kai-Zen plan, you are not paying a yearly premium for a death benefit that is unlikely to happen. Five annual contributions give you a permanent solution, whether they die or leave. And from the very first day you contribute to the plan, your business will be covered if an executive dies, leaves or becomes permanently disabled at far less expense than if you self-fund a policy.

The Most Cost Effective Solution We Know.

The Kai-Zen Plan addresses the leading reasons these applications are not appropriately covered by the businesses today…cash flow. Kai-Zen uses lender money, along with your contribution, to fully fund these contingent business liabilities. There is no loan qualification or obligation on the employer or employee and that is a major breakthrough that allows this plan to be so attractive.

It also turns what is currently a cost into a potential asset of the business, improving both balance sheet value and business cash flow.

Contact us so we can tailor a Kai-Zen Plan for your business.


Significant improvement at little or no incremental cost

Kai-Zen logo

THE KAI-ZEN 162 EXECUTIVE BENEFIT PLAN is a leveraged Section 162 program that allows participating owners and executives to significantly increase their death benefit coverage to protect against life’s uncertainties. Through the use of specially designed insurance policies and arrangements with financial institutions, borrowed funds in conjunction with client contributions, are used to provide increased death benefits with the potential additional benefit of providing cash flow that can be used to supplement retirement income. The Kai-Zen Plan showcases the combined IBG/NIW core competencies of utilizing aggregation and leverage that results in 25-40% cost saving improvements vs. a self-funded plan.

HOW IT WORKS: A 162 Plan is a program for owner executives to bonus key executives and/or themselves in a cash flow effective manner. Bonuses are paid out in the normal fashion, the executive pays their tax and the remaining money is put into life insurance policies where the excess cash values grow over time. The employer takes the employee deduction as they would with any other employee compensation. The Kai-Zen plan then adds additional premium using borrowing to increase the amount of cash in the policy, thereby allowing either more death benefit to be obtained from the same bonus amount or the same death benefit with a reduced bonus amount.

Why are most 162 plans of limited interest to clients? Cash flow. For life insurance products to accumulate cash value effectively they need to be overfunded consistently year after year. Unfortunately most 162 plans assume the company has the cash flow available to allocate to these plans for at least the first 10 years, however, this is rarely the case resulting in disappointing returns for the employee. The Kai-Zen Plan combines client contributions with financing to significantly increase the cash value in the life policy, giving the following possible advantages:

  • Less money is required for the same death benefit or an increased death benefit on the original amount.
  • By over funding every year for 10 or more years, the policy cash values compound, resulting in more death benefit than can be achieved by the same level of client contribution.
  • For those below the age of 55, there is a great probability of supplemental post retirement income in the form of policy loans that would be difficult to self-fund otherwise, thereby making the plan beneficial irrespective of when the insured dies.
  • Because of the partial payments by the executive to the policy, the policy represents the full security for the loan. No employee/employer guarantees are required.

The diagram shown below is for a 55 year old male standard non-smoker with $1m of death benefit coverage.


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