Executive Benefits

A company can provide “golden handcuffs” to  key executives by purchasing life insurance as part of an executive bonus plan. The executive owns the life insurance policy and pays the premiums, and the company “bonuses” the executive an amount equal to the premium and tax liabilities. The executive can use the policy’s cash value to supplement their retirement funds or use it for a variety of other purposes. If the executive were to die during employment, the policy’s death benefits would be paid to the insured’s family typically income tax-free.