The Kai-Zen Plan is designed for business owners, doctors, attorneys, and similar key executives and professionals. To qualify, you must be able to obtain a standard or better risk class with the carrier, be age 65 or under, and meet the following financial criteria by carrier:
National Life Group – have an annual income of at least $100,000
Minnesota Life – have a net worth of at least $5 million
Allianz- have a net worth of at least $2 million and an annual income of at least $200,000
The Kai-Zen Executive Benefit Plan combines bank financing to match the contributions made by the employer/executive to purchase a death benefit and maximize executive benefits. The Kai-Zen plan allows employers/executives to get the same benefits for less money or more benefits for less money.
Just as you might finance a house or a car, you can now finance your benefits. The benefits most executives want and need are:
- Additional cash to supplement retirement income
- Tax Deferred Growth of the cash value
- The means to obtain tax free Income from the policy cash value
- Cash for a chronic disability
- Cash for chronic care or long term care (LTC)
- Cash if they become terminally ill
- Tax Free Death Benefit for their heirs
Employers can offer all the above benefits to their executives as well as protect their business through these more effective solutions:
- Living Buy/Sell
- Living Key Man
- Living Partner Buyout
Executive/Employer contributions are made to the plan for only five years. The financing portion matches the contribution the first five years and then takes over and pays the total contribution for the remaining five years.
The use of cash value life insurance to provide a resource for retirement assumes that there is first a need for the death benefit protection. The ability of a life insurance contract to accumulate sufficient cash value to help meet accumulation goals will be dependent upon the amount of extra premium paid into the policy, and the performance of the policy, and is not guaranteed. Policy loans and withdrawals reduce the policy’s cash value and death benefit and may result in a taxable event. Surrender charges may reduce the policy's cash value in early years.
Premium financing relies on internal policy funding to pay back the loan. This is not guaranteed and results may be more or less favorable than illustrated. The ability to internally fund a life insurance contract will be dependent upon the performance of the contract and is not guaranteed. If remaining policy values and scheduled premiums are insufficient, additional out-of-pocket payments may be needed to keep the policy in force or to repay the loan. Kai-zen is responsible for the premium financing arrangement. The life insurance companies with which they work are bound only by the terms of the life insurance policies that they issue.