Executive Bonus Life Insurance

The Business pays tax-deductible premium payments to a Life Insurance Company on a life insurance policy owned by the Executive. Because the premium payments are considered a bonus, the Executive is responsible for paying the taxes to the IRS. If desired, the Business can pay an additional bonus to the Executive to cover this tax liability.

The Executive retains full ownership and control of the policy. This includes the ability to receive tax favorable income from the policy upon request and to name the policy’s beneficiary. The income received represents a combination of partial withdrawals and/or policy loans from the life insurance policy. Current law allows these amounts to be paid to the Executive on a totally income tax favorable basis.

If the Executive’s death should occur at any time while the life insurance policy is in force, income tax-free death benefits will be paid to the Executive’s Beneficiary taking into account lifetime withdrawals and loans.