Get Universal Life Insurance —
And A Business Tax Deduction!
The theory behind a 79 plan is simple-buy inexpensive term insurance on the employee (which is deductible) and a cash-building policy for the key employee(s) or owner(s) — in other words, you — which can be used for supplemental retirement income.
The plan, as devised before the recent proposed 412(i) regulations, was more tax favorable, but even now in its current form the plan it 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. (If your company has more than 40 employees (unless every owner wants to take part in the plan), the term costs of insurance for the staff make this less cost-effective.)
- You are looking for a way to purchase life insurance in a partially 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 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 pitched 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 970.744.4626, or sign up for a free consultation and give us your questions, and we’ll get back to you with answers.
