Good for business quiz

Whether your company is just emerging, flourishing or maturing, your business and personal financial needs are unique. Because you have worked hard to develop and improve your business, you will want to protect your investment.

How much do you know about plans that can protect your business? Take our quiz to find out.

» Learn more about how Key Person Life Insurance works.

Match the business planning technique that's best for each scenario described.

Scenario 1: Planning for changes in ownership

A	Buy-Sell Agreement — Funded by life insurance, this is the most common business continuation planning tool. Life insurance funds the agreement, which establishes the value of your business and assures a ready market for your share in the business after you are gone.
B	Key Employee Life Insurance — Provides important funding when you lose a key employee.
C	Personal Estate Planning — Helps preserve the full value of your business upon your death.


1.			A&D Manufacturing is concerned about losing Allan, one of their key employees. Since Allan is responsible for generating over 50 percent of the company's sales, if Allan died before retirement, the company would need funds to cover the loss in sales and give them time to find another producer.

2.			Sam owns a small business with two partners. He wants to make sure that his family gets a fair price for his share of the business when he dies. He also wants his partners to be able to own the business exclusively, without the risk of adding new owners.

3.			Susan wants a plan that will help cover her estate taxes and liquidity needs upon her death so her business can be preserved for her family and her employees.

Scenario 2: Using business dollars for personal benefits

A	Split-Dollar Life Insurance — Your company can help pay the premium for your own life insurance or for a key employee's life insurance.
B	Disability Insurance — Covers a portion of your salary when you are unable to work.
C	Stock 303 Redemption — Your business redeems stock from your estate to get cash to meet your estate's obligations.


1.			Jennifer wants personal coverage in case she becomes unable to work due to illness or injury. She would like the benefit to be tax-deductible for her business and paid by her company.

2.			Tim's stock is worth more than 35 percent of his adjusted gross estate. He wants to find a program to help pay his estate taxes and settlement costs upon his death.

3.			Jill wants help paying for her own life insurance coverage. She would like her company to help "advance" money to pay the annual premium. She is also interested in offering this benefit to select key employees.

Scenario 3: Employee benefits to increase income and improve key employee retention

A	Disability Salary Continuation Planning — Helps protect you, your employees and your business from the financial consequences of a disability.
B	Qualified Pension and Profit-Sharing Plans — Employee-sponsored retirement programs.
C	Golden Executive Bonus Arrangement (GEBA) — Life insurance for select employees.
D	Financial Strategies — Helps employees manage their money more effectively to meet their financial goals.
E	Group Insurance — Can include medical, disability and life insurance programs.
F	Split-Dollar Life Insurance — Provides life insurance to select executives at a reduced cost.


1.			Kelly wants to offer a special service to her employees to help them effectively prepare for their financial future.

2.			Andy wants to make sure that his business is well-protected in the event one of his employees is disabled. He also wants a plan that is tax-deductible for his business. He is considering funding a plan with disability insurance policies.

3.			Jeff knows the importance of providing valuable benefits to help retain his employees. He wants to offer a variety of programs that provide tax deductions generated by the premiums he pays to keep the costs low.

4.			Christine wants to allow her employees to take advantage of special tax breaks with their retirement program. She also wants the option of making tax-deductible contributions to the plan.

5.			John wants to provide a special bonus plan that provides life insurance for some of his top employees and gives his business a current income tax deduction.

6.			Julie wants to offer Mike, one of her key executives, the opportunity to purchase life insurance at a reduced cost.

Securities and Investment Advisory Services are offered through:
Securian Financial Services, Inc.
400 Robert Street North, St. Paul, MN 55101-2098
Securities Dealer, Member NASD/SIPC
A Registered Investment Advisor
1-888-237-1838

Contact a Securian financial advisor or registered representative.

Last updated: Wednesday, March 26, 2008 11:00 AM