Insured Shareholder Death Benefit Program
Old Harbor Native Corporation (“OHNC”) offers its shareholders a death benefit payable through the OHNC Settlement Trust. Each shareholder, regardless of the number of shares held, is entitled to a $10,000 death benefit. This benefit is paid to the shareholder’s beneficiary as named on the OHNC Settlement Trust Beneficiary Form or to the estate of the shareholder if there is no form filed with the Trust.
The OHNC Settlement Trust finances this death benefit through individual life insurance policies it owns on those shareholders who have qualified for a policy. Each approved shareholder is insured for $25,000, with the Trust being the named beneficiary, which means the Settlement Trust over time, will recover the costs of the death benefits paid to shareholders and the insurance premiums. The life insurance program allows the Settlement Trust to offer the $10,000 death benefit to all shareholders while preserving the Trust’s invested capital.
If you have any questions regarding the death benefit policy, please contact our office.
Please see the following pdf for the Shareholder Death Benefit Beneficiary Designation:
OHNC- Beneficiary Designation Form.pdf (204 KB)
Following are some frequently asked questions about the shareholder death benefit program and the trust owned life insurance:
Do I need to apply for insurance to have the death benefit?
No, all shareholders receive the death benefit whether they are insured or not. However, shareholders are encouraged to apply for the insurance, because the greater the number of insured shareholders, the better will be the financial result for the OHNC Settlement Trust, allowing it to preserve principal for future distributions to OHNC shareholders.
If I have a stock will, do I need to complete a Beneficiary Form for the shareholder death benefit?
Yes, these are two separate documents. A stock will only governs where your Native Corporation stock will pass at your death. Shareholders may name the same or different beneficiaries for the shareholder death benefit. Death benefits of shareholders who die without completing a Beneficiary Form will be paid to their estate, and will then pass according to their regular (not stock) will or the Alaska state intestacy statutes if there is no will. Shareholders are encouraged to seek competent legal and tax counsel in all estate planning matters.
If I have not yet applied for the trust-owned life insurance, how do I go about it?
You should contact our agent, Glen Bobo at The Wilson Agency LLC, see contact information below. You will be asked to complete an application and health questionnaire for one of our carriers, MetLife or New York Life. Depending on your age and any medical or other history, additional requirements such as a blood test may be required. All personal and medical information goes directly to the carriers and not to any OHNC corporate personnel. All shareholders under the age of 80 may apply.
Why are shareholders insured for $25,000 when the actual death benefit is only $10,000? Does the corporation profit from insured shareholders’ deaths?
The extra death benefit on insured shareholders is necessary to allow the OHNC Settlement Trust to recover the costs of death benefits paid to uninsurable and uninsured shareholders, as well as all premiums paid. Since only about half of the OHNC shareholders are in the insured group, the higher insurance amount is necessary to allow the trust to fully recover its costs over time. There is no profit to the corporation built in to the model.
Are these plans common in Alaska Native Corporations?
No, OHNC’s plan is very unique, and represents a significant benefit to being a shareholder. Very few regional or village corporations offer any assistance for a shareholder’s final expenses, and generally they offer only small amounts, often based on need. OHNC provides every shareholder $10,000 regardless of need. The intent is to provide shareholders’ heirs with a resource to honor the final wishes of deceased shareholders. The use of commercial life insurance contracts as the funding method allows the trust to offer this significant benefit without significantly diminishing trust assets over time.
What if I have additional questions about the shareholder death benefit plan?
For general questions, you may contact the OHNC corporate offices in Old Harbor or Anchorage. You may also contact our agent, Glen W. Bobo, CLU, ChFC of The Wilson Agency, LLC in Anchorage, 907-277-1616 or glenb@thewilsonagency.com.