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Successful companies depend on employee retention programs to keep the good employees they recruit.  In most cases, the key to success is retaining certain key employees.  Many companies will try to retain key-employees with a powerful salary and maybe a non-compete contract clause.  A more effective alternative may be an Executive Benefit program.

One of the most common executive benefits is Key-Man Insurance.  These mitigate the loss of revenue production if a key person dies prematurely.  Two other types of executive benefits are the Section 162 Executive Bonus Plan and the Split-Dollar Arrangements providing direct perquisites to the Key Person.

In all three plans, life insurance is the underlying asset.  For the Key-Man Insurance Plan, either term life or a policy which accumulates cash value may be used.  For the Executive Bonus and the Split-Dollar plans a life insurance policy with a cash build up component must be used.

For more information, please contact Bridgeport Benefit Advisors.

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The material on this page is intended as general descriptions of the concepts presented.  It is for educational purposes only and it not intended to provide specific financial or tax advice.  These descriptions cannot take into account your specific conditions and situation including the data required for underwriting purposes, financial circumstances, risk tolerance, and other factors.