Broker Check

You have talented employees and they are driving your business.  Let us help you compensate your best employees.  Offer them an incentive to differentiate you from your competitors.

If you NEED to:

  • Retain key employees
  • Further engage those employees in the business
  • A simple, flexible plan
  • An income tax deduction (who doesn't?)

And your STATUS looks like this:

  • Currently offering a 401K
  • As key employee’s salary increases, they are hitting the maximum contribution cap
  • Interested in more?

Read on...

Offer An Executive Bonus Plan (aka Section 162 Bonus Plan)

An executive bonus plan is a raise in pay that you give your key people by depositing money into life insurance policies insuring them.

Potential benefits for your business

  • You select who gets to participate
  • Provide additional financial incentives to retain employee
  • Ensure continued employment with the executive bonus agreement
  • Your premiums are tax deductible

Potential Benefits for your key employees

  • They can invest more for retirement
  • Their earnings grow tax-deferred
  • They can leave an income tax-free death benefit to their beneficiaries
  • They own and control the policy


  • The premiums are taxed as ordinary income to the employee, unless you cover the tax.
  • The premiums must be considered reasonable compensation when added to all other compensation for the employee.
  • The business can deduct the premiums as an expense.
  • The executive bonus agreement can include vesting, repayment and withdrawal restrictions to encourage employee retention.
  • The employee must be insurable.



 Aaron owns a landscape company. His top landscape designer, Kathy is key to the company’s sales and growth.

The challenge:

  • Aaron wants another way to reward Kathy
  • He also wants to give her a good reason to stay with the business

The solution:

  • Aaron offers Kathy an executive bonus plan with a $25,000 premium invested annually to help supplement Kathy’s retirement
  • Kathy’s total annual bonus amount is actually $35,714 to cover the additional taxes and keep her net pay the same as before the bonus
  • Aaron’s business receives a deduction for the bonus paid
  • Aaron includes a restrictive endorsement and a bonus repayment agreement with a five-year vesting schedule to keep Kathy around.

As you review this hypothetical example, please note that it is not intended to represent any specific person or situation. The assumptions we’ve used are for illustrative purposes, and actual results will vary.

Contact us below for a free consultation to review your current retirement plan:

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Directors and Officers Liability Insurance

Not only can D&O insurance provide financial protection, but it can help improve an organization’s decision-making.