EXECUTIVE BENEFIT PROGRAMS

Executive Benefit Programs

 

You can help retain key employees and attract new talent by offering executive benefits. Plans can be customized to provide for the financial needs of key executives, using an individual life insurance policy, annuity contract, or a combination of both.

You can implement employee benefit programs and strategies such as qualified or non-qualified deferred compensation programs, executive bonus programs, Executive 162 Bonus Plans, split-dollar insurance, simplified employee pension plans, and savings incentive match plans.

Generally, executive benefit programs are paid for with an individual life insurance policy, annuity contract, or a combination of both. Executive benefit programs help employers attract and retain top talent. These types of benefits help executives plan to maintain their lifestyle, prepare for the unexpected and accumulate wealth for their retirement.

 

Non-Qualified Deferred Compensation Plans

 

Non-qualified deferred compensation plans are for companies with highly compensated employees whose ability to maximize plan contributions may be limited by the qualified plan. They are an option for helping these employees address their retirement needs while also helping your company attract and retain key executives. The employer and executive enter into a legal agreement in which the employer agrees to provide specified retirement and death benefits in exchange for the executive’s service. The plan is typically funded with life insurance that is owned by and payable to the employer. Benefits are deductible by the employer when paid and taxable to the executive when received.

 

Executive Bonus Plan

 

The executive purchases a life insurance policy on his or her own life and the employer agrees to pay the premium. If the amount of the premium bonus is reasonable, then the employer is entitled to a current income tax deduction. The executive reports the amount of the bonus as additional taxable compensation. As owner of the life insurance policy, the executive has full access to policy cash values and names his or her own personal beneficiary.

 

Executive Carve Out

 

Delivering enhanced benefits, including disability income insurance, to the executives and senior professionals in your company could help to keep you competitive in the market.

An executive benefit plan can be developed to satisfy the disability income insurance protection needs of your executives. Typically, most group long-term disability benefits may only cover a fraction of a high-income earning executive’s net monthly income. You can obtain a policy to supplement the long-term disability group coverage your company may be currently providing. And executives have the flexibility to purchase a policy to fit their needs and more closely align with their overall income.

Supplemental individual disability income insurance issued on a guaranteed standard issue basis provides executives important disability income insurance coverage with simplified underwriting.

Disability income insurance can be offered to executives on a voluntary basis or as a company-paid benefit. Disability income insurance can be implemented with little or no cost to employers. As a voluntary benefit, it provides executives with non-cancelable, portable coverage at a reduced premium. Generally speaking, a company may enjoy tax benefits if it provides coverage as an employer-paid benefit.

 

Split Dollar Life Insurance

 

A business sponsored benefit that rewards top performers and provides cost recovery for the company. The employer and executive split the main components of a life insurance policy: the premium, the death benefit and the cash value.

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