 Consider the Executive Bonus Plan strategy when talking with business owners. Undoubtedly you will come across business owners looking for ways to reward and retain key employees. Many business owners are not aware of the amazing benefits of using life insurance and the Section 162 Executive Bonus Plan to reward key employees while also getting a tax deduction for the bonus amount. Let’s take a quick dive into this sales idea … A Section 162 Executive Bonus Plan is a strategy where an employer uses life insurance to provide a selective benefit to key employees. Here's how it works: Structure: 1. Employer Purchases the Policy:
2. Taxable Bonus:
3. Employee Benefits:
4. Golden Handcuffs:
Key Benefits to Consider … For Employers:
For Employees:
Tax Considerations:
Ohlson Group is well-versed in all types of life insurance plans – we can help you design these types of cases. Let us know if you need help on your next one!
Unlocking Legacy Potential with Single Premium Life Insurance: A Guide for Annuity Agents11/14/2024  Single premium life insurance (SPL) policies can be game-changers for clients looking to grow and protect their legacy. Yet, many annuity agents overlook these policies, leaving valuable benefits untapped. These policies offer clients strong advantages like tax-free chronic illness benefits, return of premium guarantees and most importantly, a tax-free legacy for their loved ones. Here’s why every annuity agent should make SPL a part of their client discussions. The Standout Benefits of SPL Policies 1. Leaving a Legacy Life insurance is the only financial tool that can provide tax-free death benefits and leverage monies that are earmarked to go to loved one’s. Annuities are popular for building retirement income, but they come with a potential “tax time bomb.” When clients pass on non-qualified annuities, any deferred gains are taxed as ordinary income for their beneficiaries, often reducing the inheritance significantly—especially if heirs are in high tax brackets. For clients looking to protect their legacy, this tax burden can be a major pitfall. 2. Return of Premium Guarantees A return of premium feature gives clients peace of mind, allowing them to reclaim their premium if their needs change, keeping their investment risk low and flexible. Think of this as a money-back guarantee. 3. Chronic Illness Benefits SPL policies often include chronic illness riders, letting clients access their death benefit tax-free if they face major health issues, providing crucial financial support without tapping other investments. 4. Ease of Underwriting Carriers today employ AI and other tools to eliminate the need for a phone interview or exam. We have carriers that can render an underwriting decision in minutes! Funding Strategies for SPL PoliciesAnnuity agents can guide clients in funding SPL policies creatively: 1035 Exchanges: Use the cash value of existing life insurance to fund SPL policies tax-free. This is a smart upgrade for clients with underperforming life insurance, often resulting in higher death benefits and tax-free chronic illness coverage. Non-Qualified Annuities: For clients with non-qualified annuities set aside for heirs, converting these funds into an SPL policy can double or even triple the value transferred. Although there’s a tax cost to repositioning, the result is a larger, tax-free legacy. Ohlson Group has been working the Single Premium Life marketplace for years and has even helped develop products in the past. Our seasoned team is ready to help you put together your next wealth transfer case.
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INFORMATION CONCERNING COPYRIGHT INFRINGEMENT CLAIMS
The Ohlson Group, Inc. provides links from its website to various third party sites which may enable you to obtain locations and information outside of The Ohlson Group's control. The Ohlson Group, Inc. neither controls nor endorses such other websites, nor have we reviewed or approved any content appearing on them. The Ohlson Group, Inc. does not assume any responsibility or liability for any materials available at these websites, or for the completeness, availability, accuracy, legality or decency of these sites.
CLAIMS OF COPYRIGHT INFRINGEMENT
The Digital Millennium Copyright Act of 1998, as amended, (the "DMCA") provides recourse for copyright owners who believe that material appearing on the Internet infringes their rights under U.S. copyright law. If you believe in good faith that materials we host infringe your copyright, you (or your agent) may send us a notice requesting that we remove the material or block access to it. If you believe in good faith that someone has wrongly filed a notice of copyright infringement against you, the DMCA permits you to send us a counter-notice. Notices and counter-notices must meet the then-current statutory requirements imposed by the DMCA; see http://www.loc.gov/copyright/ for details. Notices and counter-notices should be sent to [email protected]. The Ohlson Group, Inc., (877) 844-0900. We suggest that you consult your legal advisor before filing a notice or counter-notice. Also, please be aware that there are penalties for false claims under the DMCA.
The Ohlson Group Inc, and or Joseph R. Ohlson LUTCF is licensed to do business in all states except New York.
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