Survivor Income Benefits

Strategies to help you protect your family’s future.

Business owners and key employees often put in extra hours for the sake of the business. With survivor income benefits from Principal®, you can extend a hand to help them take care of the people they love.

In the event of an unexpected death, survivor income benefits help ensure that a business owner’s or key employee’s family has a continued flow of income to make mortgage payments, pay for education, and maintain their current standard of living.

Talk to your advisor to learn more about structuring survivor benefits for your business.

Benefits that are mutually beneficial.

Implementing and sponsoring survivor income benefits can help attract and retain devoted key employees.

Endorsement Split Dollar1 protects both your business and the families of owners and key employees in the event of an unexpected death.

  • The employer owns the policy, but the employee may also name a beneficiary for part of the survivor benefit.
  • Premiums may be lower for the employee than those of traditional group policies.

Executive Bonus Plans allow the business owner to reward a key employee with a bonus that funds a personally owned life insurance policy.

  • The bonus can be tax-deductible for the business – subject to reasonable compensation restrictions2.
  • Funds may be distributed as a tax-free death benefit to the employee’s beneficiary.

Principal also offers a wide range of group and individual life insurance policies. 

Have questions?

Explore help for employers, or call us at 800-986-3343.

1 Under an endorsement method arrangement, the owner of the policy is deemed to provide a taxable economic benefit to the other party.

2 Business owners of flow-through entities (LLCs, S corporations, partnerships) are taxed pro rata on the dollars used to pay the premiums. These plans should generally be avoided by owner/employees. There may be some limited application for minority owner/employees.

The subject matter in this communication is provided with the understanding that Principal® is not rendering legal, accounting, or tax advice. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, or accounting obligations and requirements.