Executives and key employees are important assets to your business and instrumental in your company’s success. A competitive compensation package is important to attract and retain these top performers.
Beyond salary and cash compensation, executive benefits provide an additional way to reward CEOs and other key employees. Permanent life insurance is a preferred funding vehicle for many executive benefits because of its tax-advantaged status and valuable death benefit.
Securian works with employers of all sizes to provide executive compensation packages and benefits on individual and group bases.
Executive bonus arrangements
Reward executives who bring the most to your company with an individual permanent life insurance policy funded by your company. Instead of cash payments, permanent life insurance offers long-term financial benefits for your key employees and a potential benefit for their families.
After the executive applies for coverage and names a beneficiary, your business pays the policy premiums. You can deduct the premiums on your income taxes as long as the total payments to the employee are considered reasonable compensation.
The premium payments are treated as income to the key employee and reported on the key employee’s W-2, and therefore the key employee pays the income taxes.
This arrangement helps retain key executives by giving them added incentive to stay.
Your company enters into an employment agreement with the key executive(s), who commit to working for the company for a length of time. Policy instructions limit the executive’s access to policy values until such commitments have been fulfilled.
Nonqualified deferred compensation (NQDC)
Securian offers specialized solutions to allow your business to reward top earners who have reached the contribution limits set by the IRS for 401(k) and other qualified retirement plans.
Funded through a life insurance policy owned by your company, our nonqualified plans lower your executives’ current taxable income and allow for tax-deferred growth of retirement assets. Based on your company’s goals, several options are available:
- Executive deferral plans allow the executive to defer a portion of base salary, bonus or commissions, which lowers currently taxable income.
- Deferred bonus plans are restricted solely to discretionary employer contributions and reward the executive, subject to a vesting schedule you select.
- Executive salary continuation plans are funded by your company and protect against inflation to help your valued executives achieve a comfortable retirement.
Permanent life insurance products are valuable benefits on their own. Securian offers fixed or variable cash value life insurance products on an individual, multi-life and group basis.
Based on the product and arrangement you choose, employees may be the owner of the policy or you may retain ownership and management of the policy’s cash value.
Individual and multi-life insurance
Securian offers variable or indexed universal life products that can be customized to your company’s needs and goals. We also offer individual products on a multi-life basis. Our multi-life capabilities include:
- Diligent management of information associated with multiple lives
- Flexible design options for executive compensation arrangements
- Expedited Guaranteed Issue (GI) and Simplified Issue (SI) underwriting
- GI online enrollment for business-owned policies
Group life insurance
If your organization has a larger numbers of executives, key employees or partners, we offer variable group universal life (VGUL), which combines the cash-value growth potential of variable life insurance with the easy administration of group insurance.
Securian was one of the first companies to offer a variable group life product and we remain one of a handful of companies with experience in implementing and administering VGUL plans for larger groups of executives or partners. Learn more about our VGUL product.
Insurance products are underwritten by Minnesota Life Insurance Company or Securian Life Insurance Company, a New York authorized insurer. Minnesota Life is not an authorized New York insurer and does not do insurance business in New York. Both companies are affiliates of Securian Financial Group, Inc. and are headquartered in Saint Paul, MN. Product availability and features may vary by state. Each insurer is solely responsible for the financial obligations under the policies or contracts it issues.
VGUL is distributed through Securian Financial Services, Inc., Member FINRA/SIPC. 400 Robert Street North, St. Paul, MN 55101, 1-888-237-1838.
You should consider the investment objectives, risks, charges and expenses of a portfolio and the variable insurance product carefully before investing. The portfolio and variable insurance product prospectuses contain this and other information. You may obtain a copy of the prospectus from your representative. Please read the prospectus carefully before investing.
Investments in the variable subaccounts will fluctuate and the cash value available for loans, withdrawals or redemption may be worth more or less than when originally invested. Since it is primarily an insurance product, VGUL does contain fees and expenses such as management fees, fund expenses, distribution fees and mortality expense charges. The variable investment options are subject to market risk, including loss of principal.
Please keep in mind that the primary reason to purchase a life insurance product is the death benefit.
This information may contain a general discussion of the relevant federal tax laws. It is not intended for, nor can it be used by any taxpayer for the purpose of avoiding federal tax penalties. This information is provided to support the promotion or marketing of ideas that may benefit a taxpayer. Taxpayers should seek the advice of their own tax and legal advisors regarding any tax and legal issues applicable to their specific circumstances.
Life insurance products contain fees, such as mortality and expense charges (which may increase over time), and may contain restrictions, such as surrender periods. Variable life insurance products contain additional fees, such as management fees and fund expenses. The variable investment options are subject to market risk, including loss of principal.
Policy loans and withdrawals may create an adverse tax result, in the event of a lapse or policy surrender, and will reduce both the surrender value and death benefit.
Securities and Investment Advisory Services are offered through:
Securian Financial Services, Inc.
400 Robert Street North, St. Paul, MN 55101-2098
Securities Dealer, Member FINRA/SIPC.
Registered Investment Advisor