A Whole New Way of Thinking about - Funding Corporate Benefits
ABILTM for Businesses
A New Way of Funding Employee Benefits
A major issue facing businesses of all sizes is the conflict between offering competitive employee benefits and executive compensation packages and the need for cash flow for operations and expansion. These entities have many loyal and talented employees that deserve to be thanked. But however deserving these people might be, funding qualified and non-qualified benefit plans or buyout packages is expensive. Most of these organizations don’t have the cash immediately available, nor do they want to divert resources from critical other activities.
With The ABIL PlanTM, life insurance can be used to create significant additional cash flow (without the need for deaths), thereby eliminating the need to alter benefit programs. ABILTM works because economies of scale have allowed us to work directly with the world’s largest insurance companies to utilize specific insurance products, which are designed for sustained cash growth. This, coupled with special financing arrangements from major commercial lenders allow for the securing of aggressively priced loans generally at rates as low as 1.25 – 1.75 points above LIBOR. The result is a funding arrangement which allows private sector businesses to fund future liabilities utilizing a leveraged funding solution that really works.
The Basics
With The ABIL PlanTM, benefit programs can be funded with leveraged money. Businesses can provide life insurance policies to their employees, then use the cash value of the policies combined with other assets (if necessary) to collateralize a loan in order to fund the premiums instead of paying out-of-pocket. With the The ABIL PlanTM interest is usually (but not always) rolled up into the loan thus requiring no annual interest payments.
The ABIL PlanTM uses carefully selected insurance products that are designed to grow at a rate faster than the loan. At an appropriate time in the future, generally about 15 years, the policies have enough built up cash value to allow for the loan principle and interest to be paid off while retaining sufficient residual cash value to maintain the policies in place through age 100-120. The residual cash can then be used by the company to informally fund programs such as buyouts or post-retirement benefits. The key differentiator between ABILTM and other corporately owned life insurance solutions are that our designs can be completely financed and employees do not have to die (mortality schedules) for the plan to work.
"Take away my factories, my plants, my railroads, my ships, my transportation. Take away my money, strip me of all these. But leave me my men and women and in two to three years I will have them all again."
Andrew Carnegie
