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Frequently Asked Questions
Can I offer this to just one employee?
In many cases, yes. It can be structured as a selective benefit for key personnel. Eligibility and design may vary depending on the company and the plan's objective.
Can the executive use the cash value?
Depending on the product, cash value may be available through loans or withdrawals according to the contract rules. Loans/withdrawals may reduce cash value and death benefit, and could have tax implications; consult your CPA.
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Recognize and Retain Key Talent with a Flexible, Insurance-Based Strategy. The Executive Bonus is a compensation strategy where the company grants a selective benefit to executives or key personnel. In many cases, this bonus can be used to fund a cash-value life insurance policy (depending on eligibility) as part of long-term personal planning. The tax structure may vary; therefore, coordination with your CPA is recommended.
**No legal, tax, or investment advice. Products subject to eligibility and contract. Guarantees (if applicable) depend on the issuing insurer.**
Who is it for?
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Specialist physicians with private clinics or groups.
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Law firms with strategic partners or key executives.
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Companies that want to offer selective benefits without creating a group retirement plan.
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Businesses looking to reward high performance with a flexible approach.
How does it work?
The company provides the executive with a bonus as part of their compensation. The executive can use this bonus to purchase a life insurance policy (e.g., IUL/UL, as applicable), where the executive typically owns the policy and designates beneficiaries. The goal is to combine death benefit protection with the potential for cash value accumulation, according to the terms of the contract.
Important Note: An IUL is not a direct market investment. The interest credit is calculated using a formula linked to an index, subject to caps, participation, costs, and product conditions. Borrowing or withdrawals may reduce the value and benefits.
Executive Bonus
Key Benefits
Customizable benefit for the executive (based on objectives and eligibility).
Selective strategy without the administrative complexity of some collective plans.
The company may treat the bonus as compensation; the tax treatment depends on the structure and must be validated with its CPA.
The executive may have a life insurance policy with potential for cash value accumulation, depending on the product and the contract.
It strengthens retention and commitment when integrated into a long-term compensation strategy.
Stages of the Process
Identifying key executives: we define benefit objectives and eligibility.
Strategy design: we select policy type and parameters according to the profile and budget.
Implementation: bonus + application/hiring process subject to eligibility and insurer approval.
Annual review: adjustments as compensation, goals, or protection needs change.