Strategies for Businesses

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Executive Benefit Strategies
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Executive Benefit Strategies

Provide executive bonus arrangement to retain key people in your business.

Reward key employees with life insurance paid with deductible business dollars. Your key employees are an important reason that your business is profitable. Employers often use selective, discriminatory fringe benefits to reward those employees whose work is more responsible for creating profits. An Executive Bonus arrangement is one of these selective benefits. These types of aggreements can be structured with "golden handcuffs" which further assists in retaining these key employees.

Services

Executive Benefits Design

NFLG provides creative solutions to help you attract and retain key persons through innovative compensation strategies. Our advisors will work to customize tax-efficient programs so to meet your business needs as well as the needs of your valued employees.

How it Works?

  1. The employee owns a personal plan of life insurance and names a beneficiary.
  2. The business pays the policy premium to the insurer. It can deduct the premium on its income taxes as long as the total payments to the employee are considered reasonable compensation.
  3. The employee pays income taxes on the premium.

Life insurance products contain fees, such as mortality and expense charges, and may contain restrictions, such as surrender charges.

Types of Executive Benefits Strategies include:

  • Section 162 bonus strategies
  • Golden executive bonus arrangement
  • Non-qualified deferred compensation
  • Salary continuation
  • SERP's
  • Incentive split dollar
  • Estate protection split dollar
  • Reverse split dollar
  • Long Term Care
  • Executive Carve Out

Advantages for Implemenation

Advantages to the company include:

  • Easy administration
  • Premium payments are deductible expenses
  • IRS qualification/reporting is not required
  • You select participants
  • It is relatively inexpensive


Advantages for key employees include:

  • Business dollars pay most of the employees' costs
  • The employee's beneficiary receives an income tax-free death benefit
  • They own and control the policy and its cash values
  • It is portable — they can take it with them when they leave the company

An Executive Bonus Arrangement can be an excellent low-cost method to reward employees whose hard work helps make your business profitable.

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