An executive bonus arrangement allows an employer to pay bonuses to select employees that can be used to purchase personally owned life insurance policies. The employer's bonus payments are tax deductible as compensation, while the death benefits are received income tax free by beneficiaries. Key benefits for employers include rewarding employees, selective participation, and simple administration without approval requirements. Employees benefit from policy ownership, avoiding forfeiture risks, and accessing cash values for emergencies or investments. Restricted arrangements can provide employers continued influence through consent requirements for policy changes.
Myer Family Wealth Goal Achiever- InKnowVision Advanced Estate PlanningInKnowVision
James is 64, and a few years ago started up a Consulting Company (Consulting Corp) with his business partner Dave. They have acquired some lucrative contracts over the last couple of years, and after spending frugally his entire life, James is starting to enjoy his newly created wealth. James is divorced and makes alimony payments in the amount of $100,000/yr. on top of his $500,000/yr. in living expenses. Because the wealth and income generated by the company is recent, James has not accumulated much in the way of liquid assets yet, but the company value is significant and future profits look very promising.
Learn more at www.inknowvision.com
Myer Family Wealth Goal Achiever - InKnowVision Advanced Estate PlanningInKnowVision
James is 64, and a few years ago started up a Consulting Company (Consulting Corp) with his business partner Dave. They have acquired some lucrative contracts over the last couple of years, and after spending frugally his entire life, James is starting to enjoy his newly created wealth. James is divorced and makes alimony payments in the amount of $100,000/yr. on top of his $500,000/yr. in living expenses. Because the wealth and income generated by the company is recent, James has not accumulated much in the way of liquid assets yet, but the company value is significant and future profits look very promising.
The primary planning goals are to:
Make sure that he has sufficient funds to live on for the rest of his life (approx. $600,000/yr., including alimony, after taxes and gifts).
Reduce income taxes.
Maximize the inheritance that he leaves to his children and grandchildren. Consider passing his business interests to his children involved in the industry while providing an equal inheritance of non-business interests to those that are uninterested.
Assure that he has sufficient liquid assets available at his death to eliminate the forced liquidation of his business assets.
Eliminate or reduce estate taxes.
Jackson Family Wealth Goal Achiever - Advanced Estate PlanningInKnowVision
Chris is 68 and Beth is 59. Chris has recently just retired from an executive position in a public company. They have always led a relatively simple and conservative lifestyle and as a result have built up a very significant, and liquid, net worth. As part of Chris’s retirement package, he has an annual pension payment of approx. $360,000 (inflating). The pension alone is enough to cover their annual living expenses of $230,000. As a result, they have a large annual cash flow surplus created by the $400k in annual dividends from their equity portfolios and their tax-exempt income from municipal bond portfolios totaling $1.1M.
The main planning objective is to take advantage of the lifetime gifting exemption ($5M each) while it is still available. This is due in part to the large concentration of conservatively invested assets that are growing inside Chris and Beth’s estate. In addition, they are looking to preserve enough assets in order to provide sufficient cash flow that will ensure a comfortable lifestyle with flexibility during retirement.
Learn more at www.inknowvision.com
Most companies struggle with how to design a bonus plan that “works.” Too many have tried various approaches only to end up with either an entitlement program or an abandoned effort all together. For those who have had this experience there is hope and help—and this webinar will offer both. Learn how to approach bonus plan design in a way that drives better results instead of just creating additional costs.
Aligning your compensation philosophy with business prioritiesPayScale, Inc.
As an HR leader, you play a key role in your organization's success. It's crucial that you work with your company's executive leaders to develop a compensation strategy that supports company business objectives.
In this free, one hour webinar session, Stacey Carroll, SPHR, MBA will present the basics of leading an organization through the steps to align its compensation philosophy with its mission, and values. This webinar will give you a core understanding of the connection between business and compensation strategy.
Maximize your OneLife
OneLife, is all about combining business and lifestyle! When you are a member of the OneLife program, you work with a business model that has an unlimited income potential and lots of fun to be a part of. Furthermore OneLife has partnered up with the best lifestyle content, experiences that are so special, not even money can buy.
“Work hard and let the One plan take care of the rest”
OneLife, issues OneLife vouchers to its members, that can be redeemed for luxury holidays, hotels, restaurants and experience days. Want to have an unforgettable week in Bali? Or take your family, friends and loved ones on a true life changing experience? Make sure you get in on the action and fun that OneLife provides.
“The sooner you join the faster you will MAKE IT HAPPEN.”
OneLife Points start calculating based on your join date as a member, all people who join as members after you in the total company, will earn OneLife Points for you. JOIN today and participate in the ACTION fast!
“Make sure to live the life you always dreamed of and get started today”
OneAwards
One Plan, offers all members, a unique chance for serious earning potential. We value your performance. OneAwards incentivize the success stories. We award such as Black Dimond and Double Dimond. Being part of this exclusive cirlcle comes with awards, luxury items such as Rolex watches, Cash Bonuses, and Luxury cruise holidays. Other members will be inspired by your achievement – and realize what huge opportunities One offers.
https://www.onecoin.eu/signup/BrokersOne
Myer Family Wealth Goal Achiever- InKnowVision Advanced Estate PlanningInKnowVision
James is 64, and a few years ago started up a Consulting Company (Consulting Corp) with his business partner Dave. They have acquired some lucrative contracts over the last couple of years, and after spending frugally his entire life, James is starting to enjoy his newly created wealth. James is divorced and makes alimony payments in the amount of $100,000/yr. on top of his $500,000/yr. in living expenses. Because the wealth and income generated by the company is recent, James has not accumulated much in the way of liquid assets yet, but the company value is significant and future profits look very promising.
Learn more at www.inknowvision.com
Myer Family Wealth Goal Achiever - InKnowVision Advanced Estate PlanningInKnowVision
James is 64, and a few years ago started up a Consulting Company (Consulting Corp) with his business partner Dave. They have acquired some lucrative contracts over the last couple of years, and after spending frugally his entire life, James is starting to enjoy his newly created wealth. James is divorced and makes alimony payments in the amount of $100,000/yr. on top of his $500,000/yr. in living expenses. Because the wealth and income generated by the company is recent, James has not accumulated much in the way of liquid assets yet, but the company value is significant and future profits look very promising.
The primary planning goals are to:
Make sure that he has sufficient funds to live on for the rest of his life (approx. $600,000/yr., including alimony, after taxes and gifts).
Reduce income taxes.
Maximize the inheritance that he leaves to his children and grandchildren. Consider passing his business interests to his children involved in the industry while providing an equal inheritance of non-business interests to those that are uninterested.
Assure that he has sufficient liquid assets available at his death to eliminate the forced liquidation of his business assets.
Eliminate or reduce estate taxes.
Jackson Family Wealth Goal Achiever - Advanced Estate PlanningInKnowVision
Chris is 68 and Beth is 59. Chris has recently just retired from an executive position in a public company. They have always led a relatively simple and conservative lifestyle and as a result have built up a very significant, and liquid, net worth. As part of Chris’s retirement package, he has an annual pension payment of approx. $360,000 (inflating). The pension alone is enough to cover their annual living expenses of $230,000. As a result, they have a large annual cash flow surplus created by the $400k in annual dividends from their equity portfolios and their tax-exempt income from municipal bond portfolios totaling $1.1M.
The main planning objective is to take advantage of the lifetime gifting exemption ($5M each) while it is still available. This is due in part to the large concentration of conservatively invested assets that are growing inside Chris and Beth’s estate. In addition, they are looking to preserve enough assets in order to provide sufficient cash flow that will ensure a comfortable lifestyle with flexibility during retirement.
Learn more at www.inknowvision.com
Most companies struggle with how to design a bonus plan that “works.” Too many have tried various approaches only to end up with either an entitlement program or an abandoned effort all together. For those who have had this experience there is hope and help—and this webinar will offer both. Learn how to approach bonus plan design in a way that drives better results instead of just creating additional costs.
Aligning your compensation philosophy with business prioritiesPayScale, Inc.
As an HR leader, you play a key role in your organization's success. It's crucial that you work with your company's executive leaders to develop a compensation strategy that supports company business objectives.
In this free, one hour webinar session, Stacey Carroll, SPHR, MBA will present the basics of leading an organization through the steps to align its compensation philosophy with its mission, and values. This webinar will give you a core understanding of the connection between business and compensation strategy.
Maximize your OneLife
OneLife, is all about combining business and lifestyle! When you are a member of the OneLife program, you work with a business model that has an unlimited income potential and lots of fun to be a part of. Furthermore OneLife has partnered up with the best lifestyle content, experiences that are so special, not even money can buy.
“Work hard and let the One plan take care of the rest”
OneLife, issues OneLife vouchers to its members, that can be redeemed for luxury holidays, hotels, restaurants and experience days. Want to have an unforgettable week in Bali? Or take your family, friends and loved ones on a true life changing experience? Make sure you get in on the action and fun that OneLife provides.
“The sooner you join the faster you will MAKE IT HAPPEN.”
OneLife Points start calculating based on your join date as a member, all people who join as members after you in the total company, will earn OneLife Points for you. JOIN today and participate in the ACTION fast!
“Make sure to live the life you always dreamed of and get started today”
OneAwards
One Plan, offers all members, a unique chance for serious earning potential. We value your performance. OneAwards incentivize the success stories. We award such as Black Dimond and Double Dimond. Being part of this exclusive cirlcle comes with awards, luxury items such as Rolex watches, Cash Bonuses, and Luxury cruise holidays. Other members will be inspired by your achievement – and realize what huge opportunities One offers.
https://www.onecoin.eu/signup/BrokersOne
Why hole life insurance is more than just for your loved ones, create wealth, supplement your retirement income, emergency funds, psssible funding for college education, learn more about all the possibilities of whole life insurance.
There are three types of health insurance cover available in the market today. These are:
Mediclaim:
These policies cover you for hospitalization expenses. Actual hospitalization expenses are paid subject to a maximum limit of the sum assured opted for. All insurers offer policyholders cashless treatment in their network of hospitals. Policyholders can also pay upfront and then claim reimbursement from the insurer.
We recommend Mediclaim as a basic “must have” health insurance to our customers. Mediclaim can be individual or a family floater. In individual every person has his or her own individual policy. In a family floater the members of a family pay a single premium and have one insurance policy that covers the family. Sometimes parents and in-laws can also be included in the family cover. A floater cover provides a lot of flexibility for the family and normally works out more economical.
Fixed Benefit Cover
These is a new class of insurance products in the Indian market. These plans pay a pre-determined sum of money depending upon the number of days a person is in hospital and the type of surgery done. This amount may be more or less than the actual expenses you incur. We recommend this as an additional insurance to purchase after you have the basic mediclaim policy. Similar to the indemnity cover, fixed benefit cover has individual and family floater options. Fixed benefit policies will pay you the benefit even if the actual costs are reimbursed by a mediclaim policy.
Critical Illness plans
In these plans a fixed sum of money is paid if the person gets certain pre-specified diseases. Plans can cover anywhere from 9 to 35 diseases. In our view these plans are best bought after one has the basic medicliam and fixed benefit plans. They are ideal for diseases that are debilitating but may not require constant hospitalization - for example cancer or renal failure.
Each of the insurance plans described here can be taken for a single Individual or may include dependents such as the spouse, minor children, parents, parents-in-law, grandparents and grandchildren.
AALU Washington Report: Death Benefit Only Plans - Fulcrum Partners LLCFulcrum Partners LLC
Death Benefit Only plans can offer a simple and flexible option for providing benefits to attract or retain key employees. Learn more about who DBO plans benefit and how to implement them, as well as taxation benefits and concerns in this AALU Washington Report published by Fulcrum Partners LLC.
Discussion of how a pension plan sponsor may account for a buy-in annuity contract held as a pension investment. Comparison of buy-in vs. buy-out accounting.
This M Intelligence piece will explore the product mechanics and design considerations of Whole Life (WL) insurance. There are two general categories of WL...
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
Poonawalla Fincorp and IndusInd Bank Introduce New Co-Branded Credit Cardnickysharmasucks
The unveiling of the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card marks a notable milestone in the Indian financial landscape, showcasing a successful partnership between two leading institutions, Poonawalla Fincorp and IndusInd Bank. This co-branded credit card not only offers users a plethora of benefits but also reflects a commitment to innovation and adaptation. With a focus on providing value-driven and customer-centric solutions, this launch represents more than just a new product—it signifies a step towards redefining the banking experience for millions. Promising convenience, rewards, and a touch of luxury in everyday financial transactions, this collaboration aims to cater to the evolving needs of customers and set new standards in the industry.
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
what is the future of Pi Network currency.DOT TECH
The future of the Pi cryptocurrency is uncertain, and its success will depend on several factors. Pi is a relatively new cryptocurrency that aims to be user-friendly and accessible to a wide audience. Here are a few key considerations for its future:
Message: @Pi_vendor_247 on telegram if u want to sell PI COINS.
1. Mainnet Launch: As of my last knowledge update in January 2022, Pi was still in the testnet phase. Its success will depend on a successful transition to a mainnet, where actual transactions can take place.
2. User Adoption: Pi's success will be closely tied to user adoption. The more users who join the network and actively participate, the stronger the ecosystem can become.
3. Utility and Use Cases: For a cryptocurrency to thrive, it must offer utility and practical use cases. The Pi team has talked about various applications, including peer-to-peer transactions, smart contracts, and more. The development and implementation of these features will be essential.
4. Regulatory Environment: The regulatory environment for cryptocurrencies is evolving globally. How Pi navigates and complies with regulations in various jurisdictions will significantly impact its future.
5. Technology Development: The Pi network must continue to develop and improve its technology, security, and scalability to compete with established cryptocurrencies.
6. Community Engagement: The Pi community plays a critical role in its future. Engaged users can help build trust and grow the network.
7. Monetization and Sustainability: The Pi team's monetization strategy, such as fees, partnerships, or other revenue sources, will affect its long-term sustainability.
It's essential to approach Pi or any new cryptocurrency with caution and conduct due diligence. Cryptocurrency investments involve risks, and potential rewards can be uncertain. The success and future of Pi will depend on the collective efforts of its team, community, and the broader cryptocurrency market dynamics. It's advisable to stay updated on Pi's development and follow any updates from the official Pi Network website or announcements from the team.
Introduction to Indian Financial System ()Avanish Goel
The financial system of a country is an important tool for economic development of the country, as it helps in creation of wealth by linking savings with investments.
It facilitates the flow of funds form the households (savers) to business firms (investors) to aid in wealth creation and development of both the parties
USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
Key Features of USDA Loans:
Zero Down Payment: USDA loans require no down payment, making homeownership more accessible.
Competitive Interest Rates: These loans often come with lower interest rates compared to conventional loans.
Flexible Credit Requirements: USDA loans have more lenient credit score requirements, helping those with less-than-perfect credit.
Guaranteed Loan Program: The USDA guarantees a portion of the loan, reducing risk for lenders and expanding borrowing options.
Eligibility Criteria:
Location: The property must be located in a USDA-designated rural or suburban area. Many areas in California qualify.
Income Limits: Applicants must meet income guidelines, which vary by region and household size.
Primary Residence: The home must be used as the borrower's primary residence.
Application Process:
Find a USDA-Approved Lender: Not all lenders offer USDA loans, so it's essential to choose one approved by the USDA.
Pre-Qualification: Determine your eligibility and the amount you can borrow.
Property Search: Look for properties in eligible rural or suburban areas.
Loan Application: Submit your application, including financial and personal information.
Processing and Approval: The lender and USDA will review your application. If approved, you can proceed to closing.
USDA loans are an excellent option for those looking to buy a home in California's rural and suburban areas. With no down payment and flexible requirements, these loans make homeownership more attainable for many families. Explore your eligibility today and take the first step toward owning your dream home.
US Economic Outlook - Being Decided - M Capital Group August 2021.pdfpchutichetpong
The U.S. economy is continuing its impressive recovery from the COVID-19 pandemic and not slowing down despite re-occurring bumps. The U.S. savings rate reached its highest ever recorded level at 34% in April 2020 and Americans seem ready to spend. The sectors that had been hurt the most by the pandemic specifically reduced consumer spending, like retail, leisure, hospitality, and travel, are now experiencing massive growth in revenue and job openings.
Could this growth lead to a “Roaring Twenties”? As quickly as the U.S. economy contracted, experiencing a 9.1% drop in economic output relative to the business cycle in Q2 2020, the largest in recorded history, it has rebounded beyond expectations. This surprising growth seems to be fueled by the U.S. government’s aggressive fiscal and monetary policies, and an increase in consumer spending as mobility restrictions are lifted. Unemployment rates between June 2020 and June 2021 decreased by 5.2%, while the demand for labor is increasing, coupled with increasing wages to incentivize Americans to rejoin the labor force. Schools and businesses are expected to fully reopen soon. In parallel, vaccination rates across the country and the world continue to rise, with full vaccination rates of 50% and 14.8% respectively.
However, it is not completely smooth sailing from here. According to M Capital Group, the main risks that threaten the continued growth of the U.S. economy are inflation, unsettled trade relations, and another wave of Covid-19 mutations that could shut down the world again. Have we learned from the past year of COVID-19 and adapted our economy accordingly?
“In order for the U.S. economy to continue growing, whether there is another wave or not, the U.S. needs to focus on diversifying supply chains, supporting business investment, and maintaining consumer spending,” says Grace Feeley, a research analyst at M Capital Group.
While the economic indicators are positive, the risks are coming closer to manifesting and threatening such growth. The new variants spreading throughout the world, Delta, Lambda, and Gamma, are vaccine-resistant and muddy the predictions made about the economy and health of the country. These variants bring back the feeling of uncertainty that has wreaked havoc not only on the stock market but the mindset of people around the world. MCG provides unique insight on how to mitigate these risks to possibly ensure a bright economic future.
how can I sell pi coins after successfully completing KYCDOT TECH
Pi coins is not launched yet in any exchange 💱 this means it's not swappable, the current pi displaying on coin market cap is the iou version of pi. And you can learn all about that on my previous post.
RIGHT NOW THE ONLY WAY you can sell pi coins is through verified pi merchants. A pi merchant is someone who buys pi coins and resell them to exchanges and crypto whales. Looking forward to hold massive quantities of pi coins before the mainnet launch.
This is because pi network is not doing any pre-sale or ico offerings, the only way to get my coins is from buying from miners. So a merchant facilitates the transactions between the miners and these exchanges holding pi.
I and my friends has sold more than 6000 pi coins successfully with this method. I will be happy to share the contact of my personal pi merchant. The one i trade with, if you have your own merchant you can trade with them. For those who are new.
Message: @Pi_vendor_247 on telegram.
I wouldn't advise you selling all percentage of the pi coins. Leave at least a before so its a win win during open mainnet. Have a nice day pioneers ♥️
#kyc #mainnet #picoins #pi #sellpi #piwallet
#pinetwork
how can i use my minded pi coins I need some funds.DOT TECH
If you are interested in selling your pi coins, i have a verified pi merchant, who buys pi coins and resell them to exchanges looking forward to hold till mainnet launch.
Because the core team has announced that pi network will not be doing any pre-sale. The only way exchanges like huobi, bitmart and hotbit can get pi is by buying from miners.
Now a merchant stands in between these exchanges and the miners. As a link to make transactions smooth. Because right now in the enclosed mainnet you can't sell pi coins your self. You need the help of a merchant,
i will leave the telegram contact of my personal pi merchant below. 👇 I and my friends has traded more than 3000pi coins with him successfully.
@Pi_vendor_247
how to swap pi coins to foreign currency withdrawable.DOT TECH
As of my last update, Pi is still in the testing phase and is not tradable on any exchanges.
However, Pi Network has announced plans to launch its Testnet and Mainnet in the future, which may include listing Pi on exchanges.
The current method for selling pi coins involves exchanging them with a pi vendor who purchases pi coins for investment reasons.
If you want to sell your pi coins, reach out to a pi vendor and sell them to anyone looking to sell pi coins from any country around the globe.
Below is the contact information for my personal pi vendor.
Telegram: @Pi_vendor_247
Currently pi network is not tradable on binance or any other exchange because we are still in the enclosed mainnet.
Right now the only way to sell pi coins is by trading with a verified merchant.
What is a pi merchant?
A pi merchant is someone verified by pi network team and allowed to barter pi coins for goods and services.
Since pi network is not doing any pre-sale The only way exchanges like binance/huobi or crypto whales can get pi is by buying from miners. And a merchant stands in between the exchanges and the miners.
I will leave the telegram contact of my personal pi merchant. I and my friends has traded more than 6000pi coins successfully
Tele-gram
@Pi_vendor_247
If you are looking for a pi coin investor. Then look no further because I have the right one he is a pi vendor (he buy and resell to whales in China). I met him on a crypto conference and ever since I and my friends have sold more than 10k pi coins to him And he bought all and still want more. I will drop his telegram handle below just send him a message.
@Pi_vendor_247
1. Executive Bonus Arrangement
January • 2007
Concept Analysis
An executive bonus arrangement is a non-qualified employee benefit arrangement in which an employer pays a compensation bonus to one or
more selected employees, which the employee may then use to purchase a personally owned life insurance policy on his or her life.
Employee Employer New York Life
Enter into an
Pays
Applies for and owns the arrangement Selects the employee it Receives premium
wishes to benefit with an premium
permanent life insurance dollars from the
policy on his or her life. executive bonus arrangement employer (or employee).
and enters into an agreement
Names the beneficiaries of the with him or her. At the insured’s death,
life insurance policy. New York Life pays
Pays premiums (or a cash death proceeds to the
Reports premium (or bonus) bonus) for a permanent life beneficiaries named in
as additional compensation insurance policy owned by the policy.
each year and pays only the employee. (Employer may
income tax on that amount. also pay an additional bonus
Employer to the employee for the
Has access to life insurance includes income taxes he or she must
cash values during his or her premiums pay as a result of the bonus
life via loans and (“double bonus”)). Pays death
in
withdrawals1. benefit
employee’s Includes the life insurance
taxable premium (or bonus) in the
employee’s taxable income.
Beneficiaries
Deducts the premium (or
bonus) as a business expense. The beneficiaries
receive a generally
income tax free death
benefit from New
York Life at the
insured’s death.
1
Loans and withdrawals reduce any available policy cash values. In addition, loans against a policy accrue interest at the current rate and decrease
the death benefit by the amount of the outstanding loan and interest.
A D V A N C E D P L A N N I N G G R O U P
For informational purposes only. Neither New York Life nor its agents are in the business of providing legal, tax or accounting advice.
Please consult with your own professional advisors to learn more about your particular situation.
Page 1 of 3 71817 AU (exp. 01/09)
2. Executive Bonus Arrangement Concept Analysis
What is an Executive Bonus it may bonus the premiums to the insurance policy. However, if the policy
Arrangement? employee, so that he or she may write the is owned by an ILIT, each premium
check to the insurance company. payment will be considered a gift from
Sometimes, the employer will agree to an the employee to the trust and gift tax
An executive bonus arrangement, also additional bonus amount to help the issues will need to be addressed.
known as a Section 162 bonus plan, is a employee pay the income taxes on the
non-qualified employee benefit bonus. This is referred to as a “double
arrangement in which an employer pays a Restricted Executive Bonus
bonus”. In later years, the cash value of
compensation bonus to selected the permanent life insurance policy may
employees. It is most easily described as To address concerns from the employer
be accessed via policy loans or for an incentive for the employee to
employer-funded personal life insurance. withdrawals to pay the income tax on the remain with the employer (often referred
bonus amount if sufficient cash value to as “golden handcuffs”), a special
The executive bonus arrangement may be exists in the policy 2 .
of particular interest to employers who endorsement may be placed on the life
want to reward key employees with insurance policy which would require the
The cash bonus or premium paid by the employer’s consent to: borrow cash
supplemental nonqualified benefits employer will appear as additional
without extending these additional values, surrender the policy, assign or
compensation on the employee’s W-2 in pledge the policy as collateral for a loan,
benefits to all full-time employees. It the year in which the bonus is received.
may also be of interest to employers who or change ownership of the policy. This
The compensation bonus is deductible by endorsement would not give the
have qualified plans in place, but feel the employer in that same year if the
they need another benefit with which employer any rights in the life insurance
employee’s total compensation is a policy, other than the limited ability to
they can reward certain key employees. reasonable amount (I.R.C. §162(a)(1)). participate in decisions that would affect
Again, it is important to document the how the policy is used during the time
How to Establish an Executive executive bonus arrangement via a specified by the restriction.
Bonus Arrangement corporate resolution in order to help
establish the expense as a reasonable The employee would still be able to
If there are no restrictions placed on the business expense of the company, thus change the beneficiary but could not,
executive bonus arrangement, the only helping preserve the tax deduction. without the employer’s consent:
required documentation between the withdraw cash value, surrender the
employer and the employee is a corporate During the employee’s life, he or she policy, take a loan against the policy, or
resolution adopted by the employer’s accrues basis in the life insurance policy assign the policy.
board of directors. The resolution should equal to the sum of premiums paid by the
establish the purpose for the bonus (for employer. Unless the arrangement has a A “restricted executive bonus agreement”
example, to help recruit, retain and restriction on it (discussed later), the between the parties would typically
reward key employees). While it is not employee is free to take policy loans, establish when the restrictions were
required, it may nevertheless be advisable surrenders or withdrawals from the cash scheduled to expire. Triggering events
for an attorney to formally document an value 3 and would be taxed the same as if often include: the executive’s retirement
agreement in writing between the he or she had purchased the policy or disability, the attainment of a
employer and the employee that clearly individually. designated age, or when the employer
defines the terms of the bonus discretionarily releases the restriction.
arrangement. At the employee’s death, the life The agreement may also contain a
insurance death proceeds are generally vesting schedule, however if it does, the
The employee typically both applies for received by the policy owner’s total bonus becomes taxable to the
and owns the permanent life insurance beneficiary free of federal income taxes executive and deductible to the employer
policy. As the owner of the policy, the (I.R.C. §101(a)). If estate taxes are a when the policy vests in the executive
employee has the right to name the concern for the employee, he or she may without risk of forfeiture (I.R.C. §83).
beneficiaries of the policy’s death wish to establish an irrevocable life
benefit; however, the employee should insurance trust (ILIT) to own the life Once the restriction period is terminated
not name the employer as beneficiary of or otherwise expires, a written statement
the life insurance policy, otherwise the from the employee stating that the
2. Loans and withdrawals reduce any employee has retired from employment
bonus would not be income tax available policy cash values. In addition,
deductible to the employer (I.R.C. with the employer is required in order to
loans against a policy accrue interest at the
§264(a)(1)). current rate and decrease the death benefit by
remove the endorsement from the policy.
the amount of the outstanding loan and
The employer may then either pay the interest. If the executive elects to terminate
premiums on the life insurance policy employment before the restriction is
directly to the life insurance company or 3
Id. lifted, he or she may be required in a
A D V A N C E D P L A N N I N G G R O U P
For informational purposes only. Neither New York Life nor its agents are in the business of providing legal, tax or accounting advice.
Please consult with your own professional advisors to learn more about your particular situation.
Page 2 of 3
3. Executive Bonus Arrangement Concept Analysis
separate employment agreement to repay Summary What are the Benefits of an
the employer part or all of the premiums Executive Bonus Arrangement
bonused. This employment agreement
would not be tied in any way to the life What are the Benefits of an to the Employee?
insurance policy itself. If the employee Executive Bonus Arrangement
left prior to vesting and failed to repay to the Employer? • The employee (or a designated third
the employer, the employer would have party) owns the permanent life
insurance policy and the cash values.
the right to seek enforcement of the • May reward key employees.
contract in a court of law. The employer If the employee changes employers,
the employee will be able to retain
would not, however, have any rights to • Selective participation is permissible.
the life insurance cash values absent the policy (although any future
judgment from the court. premiums due will have to be self-
• Bonus is tax-deductible, subject to funded by the employee).
reasonable compensation limits.
It is also important to note that if
repayment to the employer were required, • Non-restricted executive bonus
• Creation of plan is simple, generally arrangements avoid the risk of
it is possible that the IRS might deem the requiring only a corporate resolution.
employer to have a “beneficial interest” forfeiture associated with deferred
in the life insurance policy that could compensation plans.
• No formal administration is
jeopardize the income tax deduction it necessary.
would otherwise be entitled to without • Accumulating cash values may be
such a requirement. The client should borrowed against or withdrawn 4 to
• The amount of bonuses and life help in emergencies, at retirement, or
consult his or her own professional
insurance coverage on various for personal investments.
advisors regarding their own tax situation
employees can differ.
if a repayment agreement is
contemplated. • Premium bonuses are not subject to
• The plan is not subject to IRS qualified plan contribution limits.
approval or restrictions.
In most other aspects, the restricted
executive bonus functions identically to • Distributions from a life insurance
the executive bonus arrangement. policy that is not classified as a
Modified Endowment Contract are
not subject to the 10% premature
distribution penalty for distributions
prior to age 59 ½ (I.R.C. §72(t)).
• The death benefit may be received
income tax free (I.R.C. §101).
• Life insurance death proceeds may
be used for estate settlement costs.
New York Life Insurance Company
New York Life Insurance and Annuity
Corporation (A Delaware Corporation)
51 Madison Avenue
New York, NY 10010
www.newyorklife.com
The Company You Keep®
4. Id.
A D V A N C E D P L A N N I N G G R O U P
For informational purposes only. Neither New York Life nor its agents are in the business of providing legal, tax or accounting advice.
Please consult with your own professional advisors to learn more about your particular situation.
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