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Financial Planning > Tax Planning

Employer BenefitsEmployee Benefits to REBAs

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Employer Benefits

–Immediate income tax deduction.

–Selective participation.

–Restricted employee access to cash value.

–Retention tool for key employees.

–Funding that is not limited by contribution limitations of qualified plans.

–Minimal annual administration needs (possible Department of Labor notification required).

Employee Benefits

–Ownership removes policy from the claims of corporate creditors.

–Out-of-pocket expense limited to tax on bonus, freeing up personal fund that otherwise would have been needed for personal insurance.

–Availability of income tax-deferred growth on cash value accumulations and income tax-free investment sub-account transfers.

–Possibility of accessing cash value on an incentive tax-favored basis (in the form of withdrawals down to basis, then loans) to help supplement retirement income.

Reproduced from National Underwriter Life & Health/Financial Services Edition, June 11, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

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