Insert subtitle here.

Executive Compensation

Sun Executive UL for the Small Business Market

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Disclosures

Sun Life Financial, its distributors, and its respective representatives do not provide tax, accounting, or legal advice. Any tax statements contained here in are not intended or written to be used, and can not be used, for the purpose of avoiding U.S. federal, state, or local tax penalties. Clients should consult their own independent advisors about any tax, accounting, or legal statements made herein.

Universal Life products are issued by Sun Life Assurance Company of Canada (Wellesley Hills, MA) and in New York, by Sun Life Insurance and Annuity Company of New York (New York, NY). All guarantees are based on the claims-paying ability of the issuing company. All companies are members of the Sun Life Financial group of companies.

©2010 Sun Life Assurance Company of Canada (U.S.). All rights reserved. Sun Life Financial and the globe symbol are registered

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Different goals; one flexible solution• Business members can have different goals for an

executive benefit plan

CFO: Wants a solution

with minimal impact on the bottom line

Key Person: Expects rewards

plus an incentive to stay and work hard

CEO: Needs help

recruiting, rewarding, and replacing

executive talent

Owner: Is looking to fund

own retirement and succession plan

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Different goals; one flexible solution

• Qualified vs. Non-Qualified plans

Qualified Plans Non-Qualified Plans

TaxationContributions are deductible to the employer and employee

Contributions are not tax deductible

Discrimination rulesMost employees have to be eligible

None

Administration costs Costly to administer Can be cost efficient

Complexity Red tape No red tape issues

Vesting requirementsStrict vesting rules; no golden handcuffs

No vesting rules

Plan design Limited flexibility Flexible

LimitsCaps for highly compensated employees

No caps

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Different goals; one flexible solution• What Non-Qualified plans offer

Increase your company’s

market position

Greater retirement benefits

for you and key employees Help you attract,

reward, and retain key employees

Substitute or supplement for

equity-based comp packages

Allow you to select which key

employees benefit

Motivate key employees, maximizing productivity

Non-Qualified Plans

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Different goals; one flexible solution

• Non-Qualified plan business strategies:

Deferred Compensation Plan

Supplemental Executive Retirement Plan (SERP)

Executive Bonus Plans

Split Dollar

Key Person Indemnity

Buy-Sell Agreement Funding

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Different goals, one flexible solution

• An employer promise to pay an executive a future benefit

– May be Qualified:• Must meet provisions to “qualify” for special tax

treatment

– or Nonqualified:• Offer greater flexibility in design• Must meet fewer rules• Discretionary• BUT, contributions are not currently deductible

WHEN FUNDED

APPROPRIATELY,

DEFERRAL OF

CURRENT SALARY

OR BONUSES ON A

PRE-TAX BASIS

Deferred Compensation Plan

Executive Benefits

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Different goals; one flexible solution

• Funded by the business for the benefit of select key employees

• Provides key employees with supplemental retirement income

• On top of defined contribution plans, give key employees more robust retirement package

Supplemental Executive Retirement Plan (SERP)

EMPLOYER

AGREES TO PAY

SELECT KEY

EMPLOYEES A

SPECIFIED INCOME

FOR A SPECIFIED

TIME, WITH NO

EMPLOYEE

DEFERRAL

Executive Benefits

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Different goals, one flexible solution

• An employer promise to pay an executive a future benefit

– May be Qualified:• Must meet provisions to “qualify” for special tax

treatment

– or Nonqualified:• Offer greater flexibility in design• Must meet fewer rules• Discretionary• BUT, contributions are not currently deductible

WHEN FUNDED

APPROPRIATELY,

DEFERRAL OF

CURRENT SALARY

OR BONUSES ON A

PRE-TAX BASIS

Deferred Compensation Plan

Executive Benefits

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Different goals; one flexible solution

• Potential for immediate income tax deduction

• May provide golden handcuffs

• Discriminatory so key execs can be rewarded

• Inexpensive to administer

• Can be life insurance protection and supplemental retirement income for key employee

Executive Bonus

BONUS MADE

TO SELECT

EXECUTIVES TO

BUY LIFE

INSURANCE

Executive Benefits

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Different goals; one flexible solution

• Provides option of low-cost life insurance to the employees

• Business and employee split the cost of policy premium

• In event of insured’s death, company recovers paid premiums; employee’s beneficiary receives policy face amount

ALLOWS A

BUSINESS TO

RECOVER

PREMIUMS PAID,

AND CAN BE

STRUCTURED SO

THE EMPLOYEE’S

BENEFICIARY CAN

RECEIVE THE FULL

POLICY FACE

AMOUNT IF

DESIRED

Split Dollar

Executive Benefits

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Different goals; one flexible solution

• Protects your business in the event of the death of a key employee

• Provides liquidity needed to:

– Maintain operations

– Replace loss of employee by recruiting/training new employee

– Contract with necessary resources to keep business running

– Overcome potential drop in business

LIFE INSURANCE

OWNED BY AND

PAYABLE TO THE

BUSINESS TO

INDEMNIFY IT

UPON THE DEATH

OF A KEY

PERSON

Key Person Indemnity

Business Planning

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• Good succession planning depends on a well-drafted, well-funded buy-sell agreement

• Provides clear and defined succession/exit strategy to:– transform control of the business into retirement

wealth– insure that the future of the business is being

managed by desired parties– Insure business is owned as intended in the event of

retirement, disability or death

Different goals; one flexible solution

LIFE INSURANCE

USED TO FUND

A BUY-SELL

AGREEMENT

Buy-Sell Agreement Funding

Business Planning

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Sun Executive UL Highlights• High Target Premiums with Heaped

Commissions

• High Potential First Year Cash Values

• Underwriting Flexibility• GI (10+ lives)• XGI (5-9 lives)• Full Medical Underwriting (1-4 lives)

• Innovative Features• Emergency Travel Assistance Rider -

Assist America Benefit• Charitable Giving Benefit Rider

Our fastest growing product in

sales volume…

Average Case Target Premium

is $808K*

*As of 7/09

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What Should You Be Looking For?

• Business owners who may be personally underinsured

• Business owners who may not have reviewed their personal insurance for a number of years

• Owners of small to medium size businesses with business continuation needs

• Business owners who want to recruit, retain, and reward key employees

• Businesses that may lose key employees if supplemental executive benefits are not offered

• Business owners who want to supplement their (or their employee’s) retirement plan in a tax advantaged manner

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Questions to Ask

The plan you have in place…is it the right plan for you, your business, your key employees?

Do you have the right type of executive benefit plan(s) in place now for the current state of your business?

Are your plan funding vehicles sufficient to meet future personal and business objectives for you and your key employees?

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Disclosures

Sun Life Financial, its distributors, and its respective representatives do not provide tax, accounting, or legal advice. Any tax statements contained here in are not intended or written to be used, and can not be used, for the purpose of avoiding U.S. federal, state, or local tax penalties. Clients should consult their own independent advisors about any tax, accounting, or legal statements made herein.

Universal Life products are issued by Sun Life Assurance Company of Canada (Wellesley Hills, MA) and in New York, by Sun Life Insurance and Annuity Company of New York (New York, NY). All guarantees are based on the claims-paying ability of the issuing company. All companies are members of the Sun Life Financial group of companies.

©2010 Sun Life Assurance Company of Canada (U.S.). All rights reserved. Sun Life Financial and the globe symbol are registered

www.Partners advantage.com/advanced

Contact Information888-251-5525

Director of Advanced MarketsRichard Finkelstein ext 139

Senior Marketing ConsultantDavid Clifford ext 134