Premier Bonus ProgramA Premier Bonus Program is a fringe benefit available to business owners and select key employees. The plan can be used to attract, reward, and retain key employees. At the same time, it can provide a variety of benefits to help meet the person, financial, and tax planning goals of the business owner(s).
Who Benefits?Any business owner interested in using business dollars to pay for personal life insurance for themselves and key employees. When properly structured, it can proved income tax-free death benefit to your clients' heirs, tax-deferred growth, and the potential for tax-free income.
How does it work?
An executive applies for, owns, and designates a beneficiary for a life insurance policy. Each year the company makes the premium payment for the policy -- the company receives a tax deduction for this amount and it is reported as taxable income to the executive. The taxes on premiums can be paid by the employee, reimbursed by the employer, or paid through policy withdrawals or loans.
How does it benefit me?
- It is simple
- It is flexible
- There are no admin costs nor IRC 409 rules
- The income is tax deductible (for the business)
- The death benefit is income tax-free
- It is protected from creditors (dependent on state law)