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Non-Qualified Deferred Compensation
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 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.
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. Deferred
Compensation 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
death, disability or retirement of the employee, the employer pays
the agreed benefits to employee or designated beneficiary.
The
employer recovers cost of implementing plan from the life insurance
policy insuring employee.
Note:
The intent of this information provided by
termlifeamerica.com
is to inform and motivate the general public into action. One
should consider only a qualified practicing legal individual or
entity, in the state in which you reside, when making decisions on
this subject
matter.
TermLifeAmerica.com-
Lewis Fink is licensed as an insurance agent
offering Life Insurance in the following states:
Alabama - AL ,
Arkansas - AR,
California - CA,
Colorado - CO,
Connecticut - CT,
Delaware - DE, District of Columbia - DC,
Florida - FL,
Georgia - GA,
Idaho - ID,
Illinois - IL,
Indiana - IN,
Iowa - IA,
Kansas - KS,
Kentucky - KY,
Louisiana - LA,
Maine - ME,
Maryland - MD,
Massachusetts - MA,
Michigan - MI,
Mississippi - MS,
Missouri - MO,
Montana - MT,
Nebraska - NE,
New Mexico - NM,
New Jersey - NJ,
New York - NY,
North Carolina - NC,
North Dakota - ND,
Ohio - OH,
Oklahoma - OK,
Pennsylvania - PA,
Rhode Island - RI,
South Carolina - SC,
South Dakota - SD,
Tennessee - TN,
Texas - TX,
Utah - UT,
Vermont - VT,
Virginia - VA, and
Wisconsin - WI.
Not all insurance products from all insurance companies are available in
all states.
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