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Upon the death, disability or retirement of the employee, employer pays the promised benefits to employee or designated beneficiary.
Various types of compensation and benefit arrangements have developed for top-management employees that may be funded through life insurance. In a deferred compensation agreement a key employee is promised a fixed income for a specified period following retirement.
Arrangements can provide for payments to be made to an employee in the event of disability, or to the employee's spouse (or other beneficiary) if he or she should die prior to retirement.
Life insurance is the ideal method for funding corporate liabilities. The corporation finds this arrangement attractive because it to hold the key employee, since the deferred compensation arrangement is normally contingent on continued employment.
Life insurance has no equal as a funding method, when it is payable upon death.
Supplemental Executive Retirement Plans
A Supplemental Executive Retirement Plan is an arrangement where an employer agrees to pay additional income to an employee upon death, disability or retirement.
Deferred Compensation Plans By Employee
Election
An Elective Deferred Compensation Plan is an arrangement where an employee defers a portion of current income until death, disability or retirement.
We have a highly trained and licensed professional staff.
Advantages To Supplemental Executive
Retirement Plans
The advantage to the employee of receiving the income after retirement is that normally he or she will be in a much lower tax bracket than if he or she received the benefit currently.
The employee is not taxed on income earned until some time in the future.
The employer can selectively choose the participants of the plan.
Benefits can be designed as "golden handcuffs" to encourage a key employee to continue to work for the employer.
Most employers can provide unlimited benefits in place of, or in addition to, those receivable under tax-qualified pension or profit sharing plans.
Why Non Qualified Deferred Compensation
Agreements Should Be Fund With Life
Insurance?
Life insurance is the only vehicle that can assure that the funding will be complete at the death of the employee.
Life insurance generally accumulates on a tax-deferred basis. Life insurance can be designed so that most employers recover their costs on a tax-free basis.
Deferred Compensation Plans By Employee
Election
The employer agrees to pay employee or designated beneficiary supplemental benefits upon death, disability or retirement of employee.
The employer applies for and is the owner and beneficiary of a life insurance policy insuring the employee.
Upon the death, disability or retirement of employee, employer pays the promised benefits to employee or designated beneficiary.
The employer recovers cost of implementing plan from the life insurance policy insuring the employee.
The employee agrees to defer a portion of current income and employer agrees to pay the employee or designated beneficiary.
The employer recovers cost of implementing plan from the life
insurance policy insuring employee.
Note: The intent of this article furnished by termlifeamerica.com is to inform and motivate the general business public into action. One should consider only a qualified practicing legal individual or entity; in the state in which you reside for qualified business-planning advice.
We specialize in all aspects of this discipline.
Included are, Term, Universal, and Permanent Policies, as well
as Final Expense.
Related:
We have a highly trained and licensed professional staff. We specialize in all aspects of this discipline.
Included are, Term, Universal, and Permanent Policies, as well
as Final Expense. We guide our clients on issues involving
Personal Family Protection, Estate Planning and Estate Conservation, Business Planning
to include, Buy Sell Agreements, Deferred Compensation, and Executive Compensation. We offer spreadsheets
for
Term Life Insurance Quotes from Top Rated Companies.
We help you decide what type of policy is best for your goals and objectives.
Companies offer 5, 10, 15, 20, 25 or 30 year policies that can include a return of premium plan options. Some plans offer no exam underwriting for your convenience.
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The content contained on this insurance website is for informational purposes only. It
is intended for consumers who are shopping and wanting to learn more. We do not endorse any particular carriers. We
work for you and simply provide factual
insurance information. We let you decide if you want to speak with a professional agent to help with your needs. Premium rates displayed on this website are for informational purposes only. Actual rates
are based on many factors one of which is the applicants health.
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