Business owners have an opportunity to provide a Whole Life Insurance Policy for themselves while offering a group insurance benefit for their organizations through a Section 79 plan. This plan allows the owner to put a large amount of retirement savings away while providing a benefit to the staff through life insurance. These are non qualified plans that offer a tax deduction to the organization. Business owners can then utilize a large tax friendly advantage.
- Deduct all of the costs of a C corp
- Allow the transfer of corporate dollars to the business owner.
- Grow the money in a tax deferred type account
- Access to the money via loans from a tax deferred account
- Death benefits pass to heirs on a income tax free basis
- NO regulatory limits on the funding to the key participants.
- Many times provides asset protection against creditors when properly set up and administered.
- Cash value can be kept tax free as long as policy is kept in force.
One important step is to follow the IRS guidelines which are many. If the group funding of the term insurance exceeds 50,000 for the employees it will become a qualified plan. These policies above 50,000 can be very useful for Key persons coverage and will also be under different IRS guidelines.
The 401Kman offers many programs which are specialized and focused towards benefiting owners and employees. Call toll free at 877-775-0812 to find out how we can assist your organization with retirement and benefits planning. We offer a free no obligation 15 minute call which you can schedule at your convenience below by clicking on the contact tab below.