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Executive Bonus Plan: Tax Benefits For Employers

Writer's picture: LailahLailah

If you're an employer and want to incentivize key employees, but also get tax benefits, you'll want to consider an Executive Bonus Plan.


An Executive Bonus Plan allows you to provide an income bonus to your key persons within a life insurance policy. You may decide to fund their policy for 10 years as long as they stay with you. You get a tax deduction on the bonus you fund their policies.


A double bonus plan would mean that you would cover the income taxes on that bonus the employee would receive. You would get all of that income tax deducted. The employee would get a permanent life insurance product with living benefits. They would be able to provide their family with tax free death benefit, have cash value that they can access tax free, and have living benefits they can use in case of disability or illness. Since you are covering the premium and taxes in the form of a bonus, they are essentially getting it all tax free!


Watch this video for an illustration and example and if you'd like more information please contact me here.


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