What executive benefit life insurance options exist for Nevada businesses?

Nevada businesses compete aggressively for executive talent, and life insurance plays a central role in executive compensation packages. Several structures are popular among business owners seeking to attract, retain, and reward key employees.

A Section 162 Executive Bonus plan lets the employer pay the premium as a taxable bonus to the executive. The executive owns the policy—often a whole life or indexed universal life (IUL) policy—and the premium is a deductible business expense. The executive gains a permanent asset with cash value that grows tax-deferred.

A Supplemental Executive Retirement Plan (SERP) funded by permanent life insurance allows the business to informally fund future retirement income for an executive. The business owns the policy and the cash value, then distributes income to the executive at retirement through a non-qualified deferred compensation arrangement.

Split-dollar arrangements allow the employer and executive to share premium costs and death benefit proceeds according to a written agreement. Endorsement and collateral assignment methods each have different tax implications.

These structures can be meaningful recruiting and retention tools in Nevada's competitive markets. Agents in our network can help you explore the options available through A-rated (A.M. Best) carriers.