Key Employee Benefits

 

Executive Bonus Plan – Sec. 162

  • Employer pays premium for key employee for life insurance.

  • Premiums are tax deductible to employer and taxable income to employee.

  • Employer can tailor plan.

  • Plan can be for owner or key employee. Great benefit addition.

Split Dollar Life Insurance

  • Arrangement under which two partners share premium, cash value and death benefits.

  • Plan can be between an employer and key employee.

  • Can fund Buy-Sell arrangement among multiple business owners.

  • Can also be used as planning tool between family members.

Deferred Compensation Plan

  • Opportunity for business owners to lower taxable income for key employees

       (including themselves) as supplement to retirement income.

  • Enables business to recover plan costs when benefits are paid.

  • Plans are non-qualified and can be offered to select employees, as few as one. 

       Business owner can participate as well.

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Key Person Policy

 

  • Covers the loss of an employee due to death whose contribution is vital to the business.  Value can be assessed by responsibilities, intellectual Property or revenue produced by the employee. The policy can help offset the expense of replacing, training a new employee or help with the loss of revenue. The policy is usually owned by the business and the death benefit is paid to the company.

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