Company owned life insurance (C.O.L.I.) is great way to add an incentive to employees in lieu of a traditional bonus. Startups often use as an added incentive or bonus C.O.L.I. to help promote employees morale and retirement savings plans.
When a defined contributions (401K) type retirement plan contribution limit has been reached this type of incentive can offer both employer and employee benefits.
The business organization typically utilizes a C.O.L.I. plan to be written off as a business expense and quite often helps the employee avoid a higher taxable income level in most circumstances. More employee benefits plans are available at the Employee Benefits Plans Page.
Recent business start-up's and organizations of all sizes use this as a additional perk to lure and retain higher quality employees instead of a traditional type bonus when the startup has limited funds to offer.
It also is sometimes referred to as a Private Pension Plan or can be a Key Persons Coverage Policy.
There are many rules and regulations that are applicable here depending on the business type and limits to its funding.
More employee benefits plans are available at the Employee Benefits Plans Page.
We highly recommend that you call and speak to us to for more information prior to implementation. We can make sure that this type of plan is properly set up and compliant with the current laws or their can be steep fines and IRS implications if not properly administered and funded. Call us toll free at 877-775-0812 to find out more.