Executive Bonous Insurance Policy
An executive bonus plan, also known as a Section 162 plan, is a type of non-qualified plan used by companies to provide additional compensation to key employees and executives. This plan utilizes life insurance benefits to entice and retain these valuable employees. Essentially, it involves the company providing cash value life insurance policies to key employees as a bonus. The company's contribution is treated as salary for tax purposes and is used to fund the life insurance policy. By offering executive bonus plans, companies aim to reduce employee turnover and the potential financial losses that come with it.
An executive bonus insurance policy, also known as a Section 162 plan, is a type of non-qualified plan used by companies to provide additional compensation to key employees and executives. This plan utilizes life insurance benefits to entice and retain these valuable employees. Essentially, it involves the company providing cash value life insurance policies to key employees as a bonus. The company's contribution is treated as salary for tax purposes and is used to fund the life insurance policy. By offering executive bonus plans, companies aim to reduce employee turnover and the potential financial losses that come with it. If you need more specific details or have further questions, feel free to ask.
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