A type of non-qualified pension plan where the corporation pays the premiums of a cash value life insurance policy which is owned as a personal asset of the executive. The cash value of the policy is used to accumulate cash for the executive's retirement. The death benefit is used to complete the funding in the event of premature death.
An executive benefit plan in which the employer either pays premiums directly on an employee owned life insurance policy, or bonuses cash to the employee, who then uses such cash to pay premiums. Also called a "Section 162 plan."
A plan whereby an employee owns a life insurance policy that was purchased, all or in part, by the employer. The employee treats the employer's payments as reportable income for tax purposes. The employer deducts its payments as compensation. Also known as an Employee Bonus Plan.