EXECUTIVE BENEFITS OVERVIEW National Life Insurance Company Life
EXECUTIVE BENEFITS OVERVIEW National Life Insurance Company® | Life Insurance Company of the Southwest® National Life Group is a trade name of National Life Insurance Company, Montpelier, VT, Life Insurance Company of the Southwest (LSW), Addison, TX and their affiliates. Each company of NL Group is solely responsible for its own financial condition and contractual obligations. LSW is not an authorized insurer in New York and does not conduct insurance business in New York. The companies of National Life Group® and their representatives do not offer tax or legal advice. For advice concerning your own situation, please consult with your appropriate professional advisor. TC 92398(1016)3 No bank or credit union guarantee | Not a deposit | Not FDIC/NCUA insured | May lose value | Not insured by any federal or state government agency
WHY EXECUTIVE BENEFITS? PERSONAL LIFE 2 BUSINESS PERFORMANCE ECONOMIC EFFICIENCY
Elements of Executive Benefit Plans 3
YOUR BUSINESS TIMELINE CURRENT BENEFIT PLANS � Executive Bonus � Salary Continuation � Split Dollar – Loan Regime � Deferred Compensation � 4 DEFERRED BENEFIT PLANS Split Dollar – Economic Benefit Regime
COMMON TYPES OF EXECUTIVE BENEFIT PLANS EXECUTIVE BONUS SELECTIVE INCENTIVE PLANS EXECUTIVE BUSINESS BONUS THE PREMIUM PROMISE TO PAY SPLIT DOLLAR ECONOMIC BENEFIT EXECUTIVE BUSINESS SPLIT DOLLAR LOAN EXECUTIVE BUSINESS PREMIUM LOANED FIT ENE TH B D DEA DORSE EN 5 INTEREST
HOW EXECUTIVE BENEFITS WORK 6
BONUS PLANS EXECUTIVE BUSINESS BONUS THE PREMIUM 7
SALARY CONTINUATION / DEFERRED COMPENSATION EXECUTIVE BUSINESS PROMISE TO PAY Policy loans and withdrawals reduce the policy’s cash value and death benefit and may result in a taxable event. Surrender charges may reduce the policy’s cash value early years. 8
SPLIT DOLLAR ECONOMIC BENEFIT REGIME EXECUTIVE BUSINESS FIT E N H BE ED T A DE DORS EN TAX ON TERM VALUE OF DEATH BENEFIT 9
SPLIT DOLLAR LOAN REGIME EXECUTIVE BUSINESS PREMIUM LOANED INTEREST 10
What Motivates Your Decision Protection and Potential for Personal Accumulation Taking Care Of the Family Tax Concerns 11 Key Person Retention ? Business Needs Cash Flow
Next Steps 12 � Consider Your Business Situation � Consider Your Personal Situation � Identify the Key Issues � Review and Discuss With Your Planning Team
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