In this bonus program, an executive's bonus dollars can be used to purchase a tax-deferred life insurance policy of which the executive is the owner and beneficiary. The premiums paid with the bonus are tax-deductible for your company, taxable to the executive – however the bonus plan may be structured to offset these taxes due on the bonus.
- Usually requires no IRS approval
- Design and implementation is simple and administrative costs are minimal
- Can be terminated at any time pursuant only to the terms of the agreement
- Can be custom designed to meet individual needs
- Life insurance policy cash value accumulates tax-deferred
- With proper structuring, federal tax-free income can be received from the life insurance policy cash value through withdrawals and loans
- The policy is portable and can be maintained after termination of the executive bonus arrangement or termination of employment
- Not A Deposit
- Not Guaranteed By The Bank Or Its Affiliates
- Not FDIC Insured
- Not Insured By Any Federal Government Agency
- May Go Down In Value
- May Be Purchased From Any Agent or Company and the Customer's Choice
Will Not Affect Current or Future Credit Decisions
Personal and business insurance products are available through First Horizon Insurance Services, Inc. (FHIS), a subsidiary of First Tennessee Bank National Association (FTB). CA License #OD12174. In Tennessee and Mississippi, personal and business insurance products are available through First Tennessee Insurance Services, Inc. (FTIS), a subsidiary of FTB. FTIS and FHIS may transact insurance business only in the states where they are licensed or where they are excluded or exempted from state insurance licensing requirements.
Read additional information about insurance privacy policies and practices for certain states.