Tuesday, March 17, 2015

Section 79 plans

Section 79 plans offer employers an opportunity to purchase life insurance for their employees on a tax-advantaged basis. These types of plans can offer several advantages:
Tax-advantaged life insurance for key employees' personal
or business needs
Executive only taxed on a portion of the employer contribution
(generally 60-65%)
Income tax deduction at the corporate level
May allow high percentage of plan cost allocated to key employees
May provide supplementary retirement income through policy loans
and withdrawals
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Helps attract and retain key employees
Offers a limited funding commitment
Accelerated Benefit Riders available in the event of a
terminal, chronic or critical illness

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