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Tom Meaglia, ChFC®, AEP®,
CLU®, CRPC®, MSFS
Chartered Financial Consultant
Investment Advisor Representative
Chartered Retirement Planning Counselor
CA Insurance Lic. #0567507
Meaglia Financial Consulting
2105 Foothill Blvd., #B140, La Verne, CA 91750
Toll Free: 800-386-3700
Bus: 909-593-6105
Cell: 818-681-8600
Fax: 909-593-6120
Email: tom@meagliafinancialconsulting.com
Website: www.meagliafinancialconsulting.com
When you want to reward executives with a bonus but don’t have the cash flow to do it, executive bonus arrangements funded by life insurance may be an efficient option. Also known as Internal Revenue Code (IRC) Section 162 plans, executive bonus arrangements are typically additional compensation – or bonuses – given to executives and other key employees.
Executive bonus plans may give business owners the ability to deduct premium payments as a business expense. However, the business cannot recover expenses from the death benefit, because the insured owns the policy and names the beneficiary.
Because there is some flexibility in how cash value and loans are handled, business owners may restrict key executives from taking cash value or loans from the policy for a period of time. This approach can provide an incentive for key employees to remain with the company. Conversely, key employees may have access to cash value and loans throughout the life of the agreement.
However, business owners that use Section 162 plans appreciate their ability to help attract and retain key employees and their ease of administration compared to qualified plans.
Consult you financial and tax professionals to learn more.
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Thomas Meaglia is an Investment Adviser Representative of Coppell Advisory Solutions LLC, dba, Fusion Capital Management, a registered investment adviser that only conducts business in jurisdictions where it is properly registered, or is excluded or exempted from registration requirements. Registration as an investment adviser is not an endorsement of the firm by securities regulators and does not mean the adviser has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting.
Insurance and annuity products are not sold through Fusion Capital Management. Fusion does not endorse any annuity or insurance product, nor does it guarantee any insurance or annuity performance. Annuity and life insurance guarantees are subject to the claims-paying ability of the issuing insurance company. If you withdraw money from or surrender your contract within a certain time after investing, the insurance company may assess a surrender charge. Withdrawals may be subject to tax penalties and income taxes. Persons selling annuities and other insurance products receive compensation for these transactions. These commissions are separate and distinct from Fusion's investment advisory fees.
Meaglia Financial Consulting and LTM Marketing Specialists LLC are unrelated companies. This publication was prepared for the publication’s provider by LTM Client Marketing, an unrelated third party. Articles are not written or produced by the named representative.
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