Business Life Insurance
What is executive bonus life insurance?
Executive bonus life insurance (also called a Section 162 bonus plan) is a benefit where an employer pays the premium on a life insurance policy owned by a key employee. The premium is treated as compensation to the employee (taxable) and is deductible by the employer. The employee owns the policy and can name their own beneficiaries.
Key Points
- Executive bonus: employer pays premium on employee-owned life insurance policy
- Premium is taxable compensation to employee
- Premium is deductible by employer
- Employee owns the policy and names their own beneficiaries
- An independent agent can help you structure an executive bonus plan