Leadership positions frequently require customized benefit programs in order to provide suitable converges. This is a summary of several popular executive programs:

KEY PERSON LIFE INSURANCE: The loss of a key employee can be devastating to an enterprise. To protect the business in the case of unexpected death, many choose to purchase life insurance on key individuals. The business owns the policy, pays the premium, and is the beneficiary. Proceeds are used to offset potential economic losses, to fund the recruiting and training of suitable replacements, and even to provide a death benefit for the decedent's family.

KEY PERSON DISABILITY INSURANCE: Perhaps the most overlooked of the executive plans, this insurance protects the organization from potential profit loss due to the disability of a key executive. Since the risk of disability prior to age 65 is 3 times higher than death, this insurance is a very important consideration.

SPLIT DOLLAR LIFE INSURANCE: This is a plan whereby the organization assists key executives in the purchase of personal life insurance. The organization essentially lends all or a portion of the policy's premium to the insured under an interest-free loan arrangement. Death proceeds are usually paid out in a manner such that the organization recoups its loan and the balance is paid to the insured's beneficiary. In the event of termination of the agreement prior to death, the loan is typically paid back via available policy cash values.

REVERSE SPLIT DOLLAR INSURANCE: This is similar to the above except that the organization is named beneficiary until the agreement is terminated. The business' share of the premium is typically the amount necessary to pay for an equal amount of term insurance; the insured pays the balance. The cash value accrues to the insured, who also owns the policy. This form of executive benefit is growing in popularity especially in not-for-profit businesses.

SECTION 162 EXECUTIVE BONUS PLAN: In this plan the organization buys personal life insurance for the executive via a bonus arrangement. The organization pays the premium; the insured owns the policy and names the beneficiary. The business takes a tax deduction for the bonus; the insured declares the bonus as taxable income.

GROUP TERM CARVE OUT PLAN: This plan enables executives to have permanent coverage at an early age instead of the term coverage normally provided. The insured(s) are eliminated from the group term plan and provided the permanent coverage either via a "Section 162" plan or "Split Dollar" plan. The savings from eliminating the executives from the group term plan is used to offset the premiums for the permanent coverage.

NON-QUALIFIED DEFERRED COMPENSATION: These plans are completely selective and do not follow "nondiscriminatory participation" guidelines. They provide benefits only to key employees. The plan can be either employer or employee paid and must contain forfeiture provisions to avoid current taxation of benefits. Life insurance is the best means of funding a non-qualified plan.

SECTION 457 DEFERRED COMPENSATION: These are non-qualified plans available to government employees and employees of tax-exempt organizations. Deferrals are limited and benefits not generally subject to forfeiture. This plan is typically used for a selected employee group or above a certain employee "level".

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