An executive bonus plan is the formal program establishing eligibility, timing, and documentation for 162 life-insurance bonuses paid to select executives. The plan describes premium amounts, whether taxes are grossed-up, ownership/beneficiary rights, and performance or retention conditions. Because the policy is employee-owned, benefits are portable, and cash values can support future needs through loans or withdrawals. Plans are easy to implement and adjust annually, making them a practical alternative to complex deferred-compensation arrangements while still delivering meaningful protection and wealth-building to key contributors.
Advisors formalize a written 162 plan specifying who qualifies, how premiums are calculated, whether taxes are grossed up, and what happens if employment ends. The executive applies for and owns the policy; the company pays the bonus each year. The plan's simplicity makes it easy to launch and adjust without complex plan administration.
An executive bonus plan is the formal program establishing eligibility, timing, and documentation for 162 life-insurance bonuses paid to select executives. The plan describes premium amounts, whether taxes are grossed-up, ownership/beneficiary rights, and performance or retention conditions. Because the policy is employee-owned, benefits are portable, and cash values can support future needs through loans or withdrawals. Plans are easy to implement and adjust annually, making them a practical alternative to complex deferred-compensation arrangements while still delivering meaningful protection and wealth-building to key contributors.
Advisors formalize a written 162 plan specifying who qualifies, how premiums are calculated, whether taxes are grossed up, and what happens if employment ends. The executive applies for and owns the policy; the company pays the bonus each year. The plan's simplicity makes it easy to launch and adjust without complex plan administration.