TAILIEUCHUNG - Lecture Employee benefits and retirement planning - Chapter 43: Key employee life insurance

This chapter covers key employee life insurance. Several scenarios where use of a key employee plan might be indicated, including financing of nonqualified deferred comp plans and any need for liquid assets upon the death of a key employee. Tax implications are discussed from the perspective of both the employee and the employer. Personally-owned insurance is presented as an alternative. Finally, several references are provided on where to learn more. | Insurance on a key employee’s life owned by the employer with death benefit payable to employer What is it? Copyright 2009, The National Underwriter Company Corporation will incur obligation to pay a specified beneficiary or class of beneficiaries at employee’s death under death benefit only (DBO plan) Employer needs way to finance nonqualified deferred compensation arrangement with employee upon death of employee When is it indicated? Copyright 2009, The National Underwriter Company Closely held corporation needs liquid assets at death of key employee to maintain business operations Corporation will need liquid assets to purchase stock from shareholder-employee’s estate When is it indicated? Copyright 2009, The National Underwriter Company To the employee No income tax to a key employee or their estate when corporation owns the policy pays the premiums receives the death proceeds from key employee life insurance Corporate-owned key employee life insurance may affect federal estate tax paid by deceased key employee’s estate Tax Implications Copyright 2009, The National Underwriter Company To the corporation Corporation may NOT deduct corporate-paid premiums on life of key employee when corporation is owner and beneficiary of life contract Death proceeds of key employee life insurance are tax-free when paid to corporation (except for AMT potential) Tax Implications Copyright 2009, The National Underwriter Company To the corporation Possible corporate exposure to accumulated earnings tax if accumulating earnings to pay life insurance premiums brings corporate accumulated earnings above a threshold limit Possible corporate exposure to corporate alternative minimum tax Tax Implications Copyright 2009, The National Underwriter Company Personally owned insurance Use corporate funds to pay additional compensation Alternatives Copyright 2009, The National Underwriter Company Key employee life insurance can help a closely held corporation .

• Quản trị kinh doanh
• Employee benefits
• Retirement planning
• Retirement plan design
• Employee’s retirement
• Key employee life insurance
• Corporate owned life insurance
• Employee benefit planning
• Individual benefits statement
• Employee discounts
• Company cafeterias
• Employee stock purchase plans
• Section 423 plans
• Simplified employee pension
• Salary reduction SEP
• Scheduled benefits
• Legal services plan
• Lecture Human resource management
• Human resource management
• Human resource
• Quản trị nhân sự
• Employee benefits programs
• Restricted stock plans
• Employee retention
• Strategic Benefits
• Development Benefits
• Financial Reporting
• Financial Management
• Human Resources
• Legal services plans
• Employer select
• Designing retirement plans
• Stock options
• Nonstatutory stock option
• Incentive stock options
• Alternative minimum tax
• Cafeteria plans
• IRC section 125
• Flexible spending accounts
• Medical reimbursement
• Group term life insurance
• Executive carve out
• Split dollar life insurance
• Endorsement method