What it is:

• For the executive … employer paid life insurance as a fringe benefit at little or not cost
• For the employer … an executive benefit plan paid with fully deductible funds (Bonus deductible by employer unless employee is S-corporation shareholder, sole proprietor, or an employee/partner in a partnership)

How it works:

Advantages:

• Provides life insurance on and for the use of key employee
• Allows employer flexibility – no rules or limits on participation
• Can be designed to cost the employee nothing
• Bonus to pay premiums is deductible by a C-corporation employer