Executive Bonus Plan
(Section 162)


An executive bonus plan provides for the purchase of tax-deductible life insurance for you or selected key employees.

Why do you Need It?


How else can you purchase life insurance with a tax-deductible corporate dollars for personal needs, including:
Plus, such a plan enables you to recognize key employees through an arrangement where the company bonuses the premium for valuable life insurance protection on their lives.
Whichever use you prefer, the bonus is taxable to the insured who reaps all the benefits to the coverage. And it is fully deductible to the company.

How Does It Work?

Advantage of The Executive Bonus Plan

  1. It is simple to install. All that is required is the signing of an application, acceptance by the insured based upon underwriting requirements, and payment of the premium.
  2. No approval by the Internal Revenue Service is required.
  3. The employer may select the employees to be covered.
  4. Amounts of the coverage are set entirely by the employer.
  5. No maximum of minimum number of lives must be covered.
  6. The employer has discretion to continue or discontinue the plan at any time.
  7. All employer cost of the plan are tax-deductible business expense.
  8. All elements of the insurance policy are owned by the employee.
  9. Mutual policy dividends can be used by the employee to offset the tax cost of employer premium payments.
  10. Cash values may be borrowed by the employee without either disqualifying the plan or incurring tax liabilities. However, interest payments on borrowed cash values will not be tax-deductible.
  11. Virtually the only limitation when installing such a plan is the usual one with respect to reasonable compensation.