Your best people are hard to replace. An executive bonus plan lets you reward and retain key employees with employer-funded life insurance they own, a simple, selective benefit that says “we’re invested in you” without the complexity of a full retirement plan.
In an executive bonus plan, often called a Section 162 plan, your business pays a bonus that funds a permanent life insurance policy owned by a key employee. The employer typically deducts the bonus as compensation, the employee owns the policy including its cash value and death benefit, and you choose exactly who participates. It’s one of the most straightforward ways to offer a meaningful, selective benefit.
Give your most valuable people a reason to stay, and a benefit they’ll notice.
Far less complex and costly to administer than a qualified retirement plan.
Unlike group plans, you decide who participates and at what level.
The bonus is generally tax-deductible to the business as compensation.
The executive’s policy builds cash value they can use down the road.
Their family is protected with life insurance coverage, too.
Want to tie the reward to loyalty? A restrictive bonus arrangement adds a vesting schedule, so the executive gains full access to the policy’s value only after staying a set number of years. It turns a generous perk into a powerful retention tool, a benefit they don’t want to walk away from.
Informational only, not legal or tax advice. We recommend confirming the tax treatment with your accountant before setting up a plan.
Tell us who you want to retain and we’ll design the right plan.