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What is an Executive Bonus Plan?
It is a simple, yet powerful, fringe benefit plan under
which the employer can purchase life insurance on himself
and selected
key executives. Premiums are tax deductible as a business expense.
Why should you consider an executive bonus plan?
Besides providing insurance, an executive bonus plan also meets
your own personal needs and those of key executives on a tax-deferred
basis for:
- Retirement income;
- College funding;
- Estate liquidity; and/or
- Death benefit protection
An executive bonus plan is also a way to recognize key executives
by providing them with a bonus in the form of premiums paid on
personal life insurance for them.
Whether the insurance is on your own life or the lives of key
executives, the premiums are taxable income to the insured, who
reaps all the benefits of the coverage. In either case, however,
the premiums are fully tax deductible by the company.
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