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Executive Bonus Plans

An Executive Bonus Plan (IRS Code: Section 162) can be used to compliment an employees compensation on a discriminatory basis, unlike 401(k) Plans that must pass discrimination testing.  Under an executive bonus plan, an employer purchases and pays for a life insurance policy for a select group of employees. The employer pays for the policies via a pay raise to the employee(s) equal to the policy premium and in some cases an additional bonus to cover the income tax on this additional pay. The employer is able to pick and choose specific employees to participate in the plan.

Employees have full rights to the policy and its cash value and can take tax-free income from the policy in the future.  As a way to increase the plan's retaining power, a restrictive endorsement and vesting schedule may be added.

  • Rewards key employees in a discretionary manner

  • Easy to implement and maintain

  • Premiums are immediately tax-deductible

  • Employer is not obligated to make premium payments

Insurance products offered through various insurance carriers, none of which are affiliated with Samra Wealth Management, A Member of Advisory Services Network, LLC

Contact us today to learn more