Case Study

Professional in a Private Practice

“Being prepared for the unexpected.”

I met Dr. Johnson* when he was establishing his new practice and sought our financial advice. We helped the doctor establish several important financial programs:

• Disability income insurance to provide income if he became sick or hurt and could not work.
• Life insurance to provide income for his family (and pay off debts) if he were to prematurely pass away.
• Office overhead insurance to pay for the expenses of his office if he could not work due to illness or injury.
• 401(k) and pension plan to help minimize taxes during his working years and provide income in retirement.

Dr. Johnson ran a thriving practice and was successful, until the day he had a brain surgery that left him unable to keep his balance. Although he attempted to return to work, he could not function well enough to run his practice. Dr. Johnson made a claim on his two disability income programs that then covered his living expenses, as well as his office overhead.

Additionally, he had thoughtfully purchased a “waiver of premium” on his life insurance policies, which allowed him to not only keep the policies, but also convert his term life insurance (while on disability) into 10-pay whole life policies that accumulated large amounts of cash value. Dr. Johnson received disability benefits payments in excess of $500,000 per year, with approximately $300,000 of those benefits going into his whole life cash values.

*This is a case study and is for illustrative purposes only. Actual performance and results will vary. This case study does not constitute a recommendation as to the suitability of any investment for any person or persons having circumstances similar to those portrayed, and a financial advisor should be consulted. This case study does not represent actual clients but a hypothetical composite of various client experiences and issues. Any resemblance to actual people or situations is purely coincidental.

Case Study

Providing Planning Services to a Business Owner

“Building and sustaining a successful business.”

Mr. Green* owns Green Enterprises, a company he started on his kitchen table that now employs 80 people and operates in a building he owns. It took a few years (and a lot of hard work) to build a successful business, and now Mr. Green enjoys a nice lifestyle. As the company went from start-up to growth to maturity, Mr. Green needed planning services along the way.

There are many considerations to take into account:

Employee benefits

• The company needs medical/dental/long-term disability income insurance to attract and retain the best employees, and we helped facilitate and manage these benefits for Green Enterprises.

Protecting the future of the company

• We helped Mr. Green put in place a life insurance policy that would provide income to his family if he were to pass away (income replacement policy).
• We helped him purchase a key man policy that would help the company survive if anything happened to him.
• We put in place a Disability Overhead Expense Policy to pay the company bills if Mr. Green became sick or hurt and could not work.
• We put in place a Supplemental Disability Income policy to protect Mr. Green’s income and provide money for his family’s lifestyle should he become sick or hurt.

Retirement savings

• We helped Mr. Green understand the different types of retirement savings plans available to him.
• We helped him install a Safe Harbor 401(k) plan and profit-sharing program with a vesting schedule to incentivize employees to stay longer with the company.
• We helped Mr. Green manage the plan and provided quarterly employee education meetings to communicate the benefit of working at Green Enterprises.

Building a team of advisors

• We introduced Mr. Green to a CPA, an attorney and a business insurance agent.
• We coordinated services and cooperated with other professionals to help save time and provide good communication so Mr. Green could focus on what he does best.

Business succession planning

• As the company continues to grow, and as Mr. Green gets older, we helped him consider the next chapter of the company: Who would take over when he eventually retires?
• This requires careful planning, along with coordination between the advisors on the advisory team (CPA, attorney and financial advisor).

Exit planning/retirement planning

• We provided Mr. Green with a financial projection of his existing savings, plus his anticipated sales proceeds when he eventually sells Green Enterprises.
• We provided Mr. Green with a model of how his savings and assets could provide a nice retirement for him and his family.

*This is a case study and is for illustrative purposes only. Actual performance and results will vary. This case study does not constitute a recommendation as to the suitability of any investment for any person or persons having circumstances similar to those portrayed, and a financial advisor should be consulted. This case study does not represent actual clients but a hypothetical composite of various client experiences and issues. Any resemblance to actual people or situations is purely coincidental.