We want to make sure your hard-earned wealth isn’t exposed to market-like risks. With the market as volatile as ever, business owners need strategies to protect their assets and protect their retirement. Business owners, and retirees, get one check to last them the rest of their lives. At Active Wealth, we want to make sure that check gives you an income you can never outlive. Below are some strategies you can use to grow your wealth and properly set yourself up for retirement.

Indexed Universal Life (IUL) Policies

These types of policies allow the owner to allocate cash value amounts to either a fixed account or an equity index account. IUL policies are less risky than variable universal life policies because no money is actually invested in equity positions. These policies offer tax-deferred cash accumulation for retirement, but still maintain a death benefit. People who want permanent life insurance protection, but would like to take advantage of possible cash accumulations could use this type of policy as key person insurance for business owners, premium financing plans or estate-planning vehicles. Below are some of the benefits of these policies:

  • Low premium payments
  • Amounts credited to the cash value grow tax-deferred
  • The policyholder controls how much is risked in their index accounts
  • You can get market-like gains without market-like risks
  • You can protect the income of your family’s primary breadwinner with a death benefit
    • This death benefit is permanent, so it is not subject to income or death taxes.
    • It also is not required to go through probate
  • The cash value in these policies can be accessed at any time without penalty, regardless of age
  • IULs have no limits on annual contributions

Captive Insurance

What is captive insurance?

Captive insurance companies are owned by the people they insure, which means they are owned and controlled by policyholders. In short, captive insurance is a form of self-insurance. However, it is subject to state regulations just like other insurance companies.

How does it work?

The policyholder’s ownership is not an investment. There is no capital or property contributed to company outside of premium payments. Ownership of this type of insurances ends when the insurance lapses, such as when an owner no longer needs coverage and stops paying for it. A policyholder in captive insurance cannot sell, gift or bequeath anything. They can be set up in a variety of ways:

  • Pure captives insure only the owners
  • Single parent captives have a single owner (i.e., a Fortune 500 company)
  • Group captives have multiple owners (i.e., companies in a single industry may form one of these to meet their special risk needs

Captive insurers can be formed in the US or in many jurisdictions worldwide. According to the National Association of Insurance Commissioners (NAIC), there are more than 6,000 captive insurers worldwide.

Business Specifics

Traditional insurance products may not meet the specific needs of your business. If it does meet your needs, it may not be affordable. Coverage through captive insurance can be tailored to protect against difficult risks. Businesses can have better control over their cost of protection. Captive insurance is limited in scope, therefore it can more effectively manage risk and avoid price hikes that are inherent in the commercial insurance market. Besides risk management, businesses like captive insurance because they can profit if the company’s underwritings are sound.

This is a legitimate tax structure for small-business owners. Premium paid to captive insurers can be tax-deductible. There are two safe harbors under which captive insurance is viewed as real insurance:

  • 50% third party insurance safe harbor: the captive insurance company must get at least 50% of its premiums from unrelated third-party insureds for there to be significant risk distribution
  • 12 insured safe harbor: the captive insurance company must have at least 12 insured and each must have between 5% and 15% of the total risk for there to be significant risk distribution

Kai-Zen Premium Finance

What exactly is Kai-Zen?

Kai-Zen is a strategy that will help you maintain your current lifestyle should you suffer from a chronic illness, premature death in the family, or an inability to sufficiently save for retirement. Traditional retirement plans often have income caps and limitations and they are insufficient for high-income earners. Kai-Zen offers a proactive strategy to protect your future income without draining your current finances.

How does it work?

Premiums with Kai-Zen are jointly funded by bank financing and the participant or employer. The bank will provide the majority of the total contribution to your plan. The life insurance policy is the full security for the loan. Kai-Zen is designed so that the participant does not have to go through any financial underwriting or sign any loan documents. Kai-Zen is also set up to protect your benefits should your employer go bankrupt. With this policy, you are buying a life insurance policy with a larger death benefit, more living benefit protections, and the potential for more cash accumulation with the risk of losses.

Business Specifics

The Kai-Zen Strategy can provide additional funding in order to effectively address the following business situations:

  • Executive Bonuses
  • Buy/Sell
  • Key Man
  • Partner Buyout
  • Succession Planning
  • High Compensated Employee Incentives

Next Steps:

If Kai-Zen is something that interests you, these links will give you a better understanding of how it can work for you:

If any of these policies seem like they might be a good fit for your business, we would encourage you to give us a call at (770) 685-1777. Our goal is to help you invest and retire successfully. If you have school-aged children, we can also help you plan for their college and your retirement at the same time. Planning for retirement can be overwhelming, and planning for your child’s future on top of that can be too much for some. We want to help you make sense of what works best for you financially and give you strategies that will grow your wealth and protect your assets.

Other Resources for Business Owners

Disclaimer: Any comments regarding safe and secure investments, and guaranteed income streams refer only to fixed insurance products. They do not refer, in any way to securities or investment advisory products. Fixed Insurance and Annuity product guarantees are subject to the claims-paying ability of the issuing company and are not offered by BCM. These types of products are not designed for short term investments and may be subject to caps, restrictions, fees and surrender charges as described in the product contract.


Active Wealth Management is a private wealth management firm located in Atlanta, GA. Our team is passionate about educating clients in order to empower them to invest and retire successfully and we believe in managing our client’s assets actively. Active Wealth Management works with three primary groups of people; pre-retirees, retirees, and business owners.

Active Wealth Management is led by our Founder and President, Ford Stokes, and by our Senior Vice President, Brandy Seats. They aim to help clients understand their current financial situation, analyze their current portfolio, and develop a customized financial plan to accomplish their goals. If you would like more information about the firm, please visit our website, https://activewealth.com, or call our office at (770) 685-1777. You will not be passed off to another advisor. You will meet with either Ford or Brandy. You can schedule directly into their calendars at https://activewealth.com/consult/.