Get Cash Value Life Insurance —
And A Business Tax Deduction!
The theory behind a Section 79 plan is simple: buy inexpensive term insurance on the employees (which is tax-deductible) and a cash-building policy for the key employee(s)/owner(s) — in other words, you — which can be used for supplemental retirement income.
The plan was more tax-favorable, as devised before the recent proposed 412(i) regulations; but even now in its current form the plan may be just what you need — if it fits your situation.
Who is a candidate for a Section 79 Plan?
You may be if:
- you are the owner or a key employee of a company with fewer than five owners and 40 employees. The term costs of insurance for the staff make this less cost-effective if your company has more than 40 employees (unless every owner wants to take part in the plan).
- You are looking for a way to purchase life insurance in a partially tax-deductible manner for an estate plan.
- You are looking for a plan that does not have upper-end funding limits. There is no maximum amount of money the key employee/owner can deduct from the company for the purchase of life insurance.
Caution
You may hear of Section 79 Plans in the marketplace that are much more income tax-favorable than we might recommend. But we have reviewed those plans and find them too aggressive from a tax standpoint and are not plans we can recommend.
If you are being offered a Section 79 Plan, contact us to review the plan and make sure is in compliance with all applicable laws.
You can contact us at 727-588-1540, or sign up for a free consultation and give us your questions, and we’ll get back to you with answers.
