Our CEO, Karen Try, recently had the opportunity to meet and talk with Mike Randall with Nour Insurance Services. Mike and Karen’s conversation centered around one of his products, Key Partner Insurance for business owners (sometimes referred to as “Key Man” Insurance).
Getting to Know Mike Randall
Since 2003, Mike has been a trusted advisor, offering solutions to individuals, business owners, professionals, and their families. With over 20 years of experience in insurance, investments, and business financing with reputable institutions such as London Life, Scotiabank, BMO Bank of Montreal, and IG Wealth Management, Mike brings a wealth of knowledge. Rooted in his entrepreneurial background, Mike, a former Financial Consultant and Relationship Manager, understands the entrepreneur mindset, allowing him to serve his clients effectively. His business principles revolve around building strong relationships and delivering exceptional client service, focusing on life insurance, business insurance, cashflow management, and investment tax and estate planning strategies.
Mike applies an integrated approach to create personalized and successful programs aligned with each client’s goals. He values client relationships as true partnerships, ensuring integrity and care at the core of his services. Beyond his professional life, Mike, a London, Ontario native, enjoys golf and actively volunteers as a parent head coach for the local high school varsity baseball team, where his son attends school.
We would like to note that while Mike has been gracious to share his expertise with us, he encourages you to discuss any tax related matters specific to your business with your Accountant.
Q&A with Mike Randall
Q: Mike, could you tell us about the insurance solutions you offer for businesses, families, and individuals?
Mike Randall: Certainly! As an Insurance Agent at Nour Insurance Services, I provide a range of insurance solutions, including term, whole life, universal life, critical illness, and disability insurances. For businesses, we offer protection plans such as disability, key partner, and other business insurances. Additionally, we specialize in tax-efficient corporate wealth transfer plans and provide Group Benefits for employers.
Q: One interesting aspect you mentioned is key person life insurance for business owners. Can you explain how this type of insurance works?
Mike Randall: Absolutely. Key person insurance is designed to financially support a business in the event of the death of a crucial individual, whether it is a company owner, partner, or indispensable employee. The policy is owned by the business, and the company pays the premiums. The benefit is triggered upon the death or disability of the key person, providing funds to ensure business continuity.
Q: When should a business consider a key person insurance policy?
Mike Randall: Businesses often consider key person insurance when applying for a loan or financing, as it may be required by lenders. Other situations include businesses named after key individuals, where the loss could jeopardize the company. Partnerships may use it as part of a buy-sell agreement, and sole proprietors may utilize it to provide heirs with an insurance payout to close the business and pay off debts.
Q: Determining the coverage amount seems crucial. How can a business decide on the right coverage for key person insurance?
Mike Randall: It’s essential to consider a range of factors, such as the cost of finding and recruiting a replacement, operational disruption, lost sales, and the impact on the company’s finances. While there is no magic formula, a starting point is adding the person’s salary to their direct financial contribution to the company’s bottom line, then multiplying the result by at least 5.
Q: You also mentioned the type of policy matters. Could you elaborate on whether a term or permanent life policy is more suitable?
Mike Randall: Certainly. Term life insurance is more affordable but temporary, while permanent life insurance has higher premiums but provides additional benefits. Whole life insurance offers a guaranteed premium with accumulating cash value, while universal life insurance provides flexibility and potential market investments. The choice depends on factors like ownership and long-term goals.
Q: What are the tax implications of key person insurance?
Mike Randall: Premiums are generally not tax-deductible, but the cash value in a permanent policy is tax-deferred. Small businesses can borrow against the policy without causing a taxable event. Depending on policy details, the death benefit may not be taxable either.
Q: Finally, how does key person insurance fit into the broader picture of protecting and strengthening a business?
Mike Randall: Key person insurance is just one way life insurance can safeguard a business. Collaborating with financial professionals helps assess complex needs and tailor solutions for immediate requirements and long-term goals.
Thank you, Mike, for shedding light on key person insurance and its importance for business owners!
If you have additional questions, you can contact Mike directly at 519-872-5705, or by email at email@example.com.
Feel free to visit his LinkedIn profile: