Section 79 Plans
What is a Section 79 Plan?
Protection, Retirement, Innovation
A permanent benefit life insurance plan (using IRS codes) that can add substantial
retirement income via sheltered cash accumulation and protection to the business owner(s) as well as the employees
at a minimal cost and in a tax-advantaged way.
Why Would A Company (and a Business Owner) Want to Implement a Section 79
1. Additional Permanent Life Insurance Protection
2. No Limits on Funding
3. Tax-Deferred Growth of Funds
4. Employee Benefit with Minimal Costs
5. Tax Deductabilty of Plan
6. Income-Tax Free Survivor Benefit
7. Distances Assets from Company Creditors
8. Program Supported by Specific IRS Tax Code and Regulations
FOR THE BUSINESS OWNER AND KEY EMPLOYEES
Business Pays Tax Deductible Premium on Corporate
Sponsored Group Life Insurance Policy (permanent
life) on behalf of the business owner or key employee
Life Insurance Company Issues Insurance Policy
Insuring Key Employee's Life
Premium is only Partially Taxable to Owner-Employee
or Key Employee
Employee Owns Policy and All Rights Associated with the Policy
Income Tax-Free Death Benefit is Paid to Key
Cash Value can be used to Provide Tax-Free
Business Implements Group Life Insurance Plan. Employee Chooses Type and Benefit Amount.
Typically, most employees select only $50,000 of Group Term Insurance Coverage Under the Plan
Company Pays Tax Deductible Premium for Employee(s) Selected Life Insurance Policy
Employee Recognizes an "Economic Benefit" as Taxable Income (on policys > $50,000 Death Benefit)
and Owns the Insurance Policy
Death Benefit's Paid Income-Tax Free to Employee's Named Beneficiaries
If the Employee Selects a Permanent Life Insurance Policy, the Employee Can Withdraw Excess Cash
Value Income-Tax Free (Policy Loan) for Retirement Income.
Advantages of a Section 79 Plan:
Business Contributions are Tax Deductible
Cash Value Grows Tax-Deferred
Can Provide Tax-Free Income Stream for Insured Employee via Policy Loans and
Death Benefit Paid Income Tax-Free to Named Beneficiaries
Contact Us to Get More Information
and See How a Section 79 Plan could be of Benefit to You.
♣ This is not intended as tax or legal advice. We advise
consulting with your attorney or tax professional prior to engaging in any of these advanced programs.
Policy loans and withdrawls reduce the policy's cash value and death benefits (and may result in a taxable
event). Withdrawls up to the basis paid into the contract and loans thereafter will not create an immediate
taxable event, but substantial tax implications could occur upon contract lapse or surrender.