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Drive more business with an Executive Bonus plan.

An executive bonus arrangement offers a range of benefits beyond its simplicity, ease of implementation, administration, and plan design flexibility. When presented effectively to employers and comprehensively to executives, it can fulfill various planning needs.

Securing Life for Life or Life for Less

Protecting against the risk of death doesn't always require lifelong coverage. If a policy is intended to mitigate future estate tax liability, it should remain in force until the insured's passing. However, relying on the repeal of inheritance tax is a precarious gamble that should be avoided.

On the other hand, if the goal is to replace lost income in the event of death before retirement, term insurance might be a more cost-effective choice. There is no reason why a plan cannot allocate funds to support term insurance.

An Additional Resource for Retirement

In an era where highly compensated individuals face limitations on accessing qualified retirement planning opportunities, many employees are turning to over-funded permanent policies as a type of "Super-Roth IRA." These policies allow them to accumulate cash on a tax-advantaged basis, supplementing other retirement funds in later years.

Plan participants have the freedom to design their policies based on their specific needs, whether that involves slim or fat funding scenarios.

Sometimes "Policies" is the Optimal Policy

To cater to diverse needs, it may be beneficial for executive bonuses to be utilized to purchase multiple policies. For example, a term policy can protect against income loss, while a permanent product can serve lifelong needs. When retirement approaches, the term policy can either lapse or be converted if the need for permanent protection has increased.

Providing for Long-Term Care Events

Participants should consider adding a rider that allows early access to benefits in the event of long-term care needs. However, if the employee is over-funding the contract as a supplemental retirement vehicle, withdrawals for long-term care expenses might hinder the policy's effectiveness. One way to address this issue is by implementing a two-policy executive bonus arrangement, with one policy over-funded for retirement purposes and the other featuring a long-term care rider.

And Perhaps a Touch of Disability Protection

While the waiver of premium rider may not receive much attention in sales presentations today, it remains a valuable tool for ensuring policy maintenance in the event of disability or employment termination before retirement age.

To Infinity and Beyond – A Bonus is Still a Bonus

The executive bonus can be used to fund any vehicle agreed upon by the employer and employee. If additional life coverage is unnecessary, alternative options such as annuities or standalone long-term care policies can be funded. Regardless of the chosen approach, all the advantages and aspects of a 162 bonus plan still apply.

For businesses seeking a straightforward and non-intrusive benefit plan for key employees, reach out for design and sales support.

Remember, the executive bonus arrangement offers not only simplicity, ease of implementation, and flexible plan design and funding but also caters to a variety of planning needs when presented effectively to employers and comprehensively to executives.