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:
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Tax-advantaged life insurance for key employees' personal
or business needs |
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Executive only taxed on a portion of the employer contribution
(generally 60-65%) |
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Income tax deduction at the corporate level
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May allow high percentage of plan cost allocated to key employees
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May provide supplementary retirement income through policy loans
and withdrawals1 |
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Helps attract and retain key employees
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Offers a limited funding commitment
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Accelerated Benefit Riders available in the event of a
terminal, chronic or critical illness |
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