Executive Bonus Plan

A simple, yet powerful, fringe benefit that lets you, the employer, purchase life insurance on yourself and selected key executives.

An executive bonus plan is a simple, yet powerful, fringe benefit that lets you, the employer, purchase life insurance on yourself and selected key executives.

Premiums are tax deductible as a business expense. An executive bonus plan can fulfill your needs, as well as the needs of each participating executive. Besides providing insurance, an executive bonus plan can also meet an executive’s financial needs – on a tax-deferred basis – for:

  • • retirement income;
  • • estate liquidity;
  • • college funding; and/or
  • • death benefit protection.


For you as a business owner

  • The plan is a tax-deductible way to reward key executives.
  • You get to pick and choose the plan participants.
  • You do not have to cover rank-and-file employees with this plan. As a matter of fact, you are allowed to limit the plan to yourself if you prefer.
  • The plan is simple to install and requires little or no administration.
  • No IRS approval is needed.
  • An executive bonus plan encourages executive loyalty.

For your executive

  • The executive owns the policy. *
  • The accumulated cash value is available for retirement.
  • The cash value builds on a tax-deferred basis.
  • The plan provides cost-effective insurance.
  • The death benefit is income tax-free (under current tax law).
  • The proceeds may be used for estate settlement costs.
  • The cash value is typically free from claims of creditors (varies according to state law).

*The executive could agree not to access policy cash values without your consent. This type of arrangement would prevent the executive from using policy cash values to compete against your business. This is known as a “Custodial Executive Bonus.” A Custodial Executive Bonus is easy to create and involves minimal paperwork.

How it works

  1. An insurance policy insuring the executive is purchased by the executive. The executive is the policyholder.
  2. The business pays the premium.
  3. The business receives a tax deduction for each premium paid.
  4. Premiums are a taxable bonus. The executive must report the bonus as taxable income. The plan can be structured as a double bonus to cover the income tax due if the employer chooses to do so. With a double bonus, the executive has no out-of-pocket costs for the plan.
  5. The death benefit, which is income tax-free, pays to the executive’s named beneficiary.

Whatever your financial needs or goals, James Insurance Group and its Multi Insurance Carriers has the products and financial strength that can protect you and your business.

Looking for protection and guarantees?

You’ll get both with our Multi Insurance Carriers offering Executive Bonus Planning.

Are you ready?

Take a look at what you can afford by contacting James Insurance Group today. Then ask yourself … can I really afford not to?

Talk to our James Insurance Group representative to find out more about how our products can help you.

Life changes. We’ll be there.