Protect Your Most Valuable Employees MKG Insurance Agency podcast

2+ y ago 26:03

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An Executive Bonus plan using life insurance can provide a simple yet powerful retention fringe benefit for business owners and key employees. Another advantage is the business may be able to take a current tax deduction for the bonus paid in the executive bonus plan.

The business pays a tax-deductible bonus to fund premiums for a life insurance policy personally owned by the business owner.The business owner designates a beneficiary for the death benefit. The business owner may have access to policy cash values on a tax-favored basis to address personal needs such as supplemental retirement income.

*The business owner employee pays income tax on the bonus received. At death, the business owner’s beneficiary receives the death benefit proceeds, generally income tax-free.

You carry insurance coverage to protect your business from the loss of property and equipment, but what about your most valuable asset—your key employees? A key employee may be the owner, a partner, a top executive or an important member of your organization with unique talents, experience or skills that are crucial to the prosperity of your business. Key person life insurance protects your business from the financial impact of the loss of an essential employee.

As a business owner, you understand that one of your most valuable assets is the creative talent of your key employees. Your competitors also understand this and compete for the very same talent. You need a protection strategy that will give your key team members a strong incentive to remain employed at your organization. One way of managing this challenge is to offer an attractive compensation package. But salary alone may not be enough. An executive bonus plan (also known as a Section 162 bonus plan) may provide a simple solution. These plans are designed to help you attract and retain key employees.

Learn more about 162 Executive Plans:

https://mkginsuranceagency.com/162-executive-bonus-plans/

Interested in sharing your life insurance story, become a guest on our show

https://mkg-insurance-agency.captivate.fm/booking

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