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Steve Savant (Ash Brokerage) and Don Prehn (InsMark) have done it again with an excellent 6-minute video of the seven variations of an Executive Bonus Plan. One of the seven — the Controlled Executive Bonus Plan — is my personal favorite; however, the evaluation of all seven variations should be useful to you.
After you’ve reviewed Steve and Don’s video, click here for my Blog #26: Exceptional Benefits for Outstanding Executives to review in detail the material presented in their video.
Next, if you want to review details of my favorite, a Controlled Executive Bonus Plan for a non-shareholder key executive, click here for my Blog #43: Golden Handcuffs for Tom Hamilton. It is specifically designed to reward Tom, age 40, for remaining with the firm during these next few critical years while plans to sell the business are firming up. Tom will be paid a gross-up bonus in each of the next seven years to pay the seven scheduled $60,000 premiums on a personally-owned indexed universal life insurance policy with a face amount of $2,600,000. If Tom terminates employment anytime within the next seven years, the plan documentation has a provision that he owes the company an amount equal to the cumulative bonuses paid to date — a serious inducement for him to stay employed. At the end of seven years, Tom no longer has any repayment liability.
Let me tempt you with Tom’s long-range benefits with the following graphic:
I believe the Controlled Executive Bonus Plan is far superior to Loan Regime Split Dollar which, up until now, has been my go-to plan for non-shareholder benefit plans for executives of closely-held companies. Click here for my rationale.
Important Note: Many of you are rightly concerned about the potential tax bomb in life insurance that can accidentally be triggered by a careless policyowner. Click here to read Blog #51: Avoiding the Tax Bomb in Life Insurance.
Plan Documents
The unusual documentation needed for a Controlled Executive Bonus Plan is available in Version 21.0 (and higher) of InsMark’s Documents On A Disk™ in the Key Employee Insurance Plans section of specimen documents.
InsMark’s Digital Workbook Files
If you would like some help creating customized versions of the presentations in this Blog for your clients, watch the video below on how to download and use InsMark’s Digital Workbook Files.
New Zip File Downloaders
Watch the video.
Experienced Zip File Downloaders Download the zip file, open it, and double click the Workbook file name to open it in your InsMark System.
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Note: If you are viewing this on a cell phone or tablet, the downloaded Workbook file won’t launch in your InsMark System. Please forward the Workbook where you can launch it on your PC where your InsMark System(s) are installed. |
Licensing
To license our insurance software related to this Blog (InsMark Illustration System and/or Documents On A Disk), contact Julie Nayeri at julien@insmark.com or 888-InsMark (467-6275). Institutional inquiries regarding enterprise licensing should be directed to David Grant, Senior Vice President – Sales, at dag@insmark.com or 925-543-0513.
InsMark’s Referral Resources
(Put our Illustration Experts to Work for Your Practice)
We created Referral Resources to deliver a “do-it-for-me” illustration service in a way that makes sense for your practice. You can utilize your choice of insurance company, there is no commission split, and you don’t have to change any current relationships. They are very familiar with running InsMark software.
Please mention my name when you talk to a Referral Resource as they have promised to take special care of my readers. My only request is this: if a Referral Resource helps you get the sale, place at least that case through them; otherwise, you will be taking unfair advantage of their generous offer to InsMark licensees.
Save time and get results with any InsMark illustration. Contact:
- Ben Nevejans, President of LifePro Financial Services in San Diego, CA.
Joint Interviews
If you want or need help from a qualified producer for joint interviews with any InsMark illustration and are willing to share the case, email us at bob@robert-b-ritter-jr.com, and we will provide you with recommendations.
Testimonials
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Gary M. Baker, President/CEO, Bloom-Baker/Asensus of New England, Boston, MA
"I really thought I knew all the sales techniques that affect my business, but I do now, thanks to InsMark."
Sam Keck, MBA, CLU, CFP, LUTCF, InsMark Platinum Power Producer®, Financial Planner, Denver, CO
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