Executive life insurance
Executive life insurance is a type of corporate-owned life insurance that companies purchase to provide death benefits for key executives. Employers use executive life insurance policies, such as split-dollar or deferred compensation plans, to attract and retain top talent like CEOs and CFOs.
Companies typically pay the premiums on these policies, which can range from $10,000 to over $100,000 annually depending on coverage amounts, as declared by YourInsurance.info. Executive life insurance offers tax-advantaged benefits; for example, death benefits paid to beneficiaries are generally income-tax-free under IRS Section 101(a).
Policies often include cash value accumulation features found in whole or universal life products–examples include MetLife’s Corporate Advantage Program and Prudential’s Executive Life Solutions. Businesses may recover premium costs through policy loans or withdrawals if an executive leaves before retirement.
Executives’ families receive lump-sum payouts upon the insured’s death; in 2022, average payouts ranged from $500,000 to several million dollars per policy according to LIMRA data. Underwriting for executive life insurance usually requires medical exams and financial justification based on salary multiples (e.g. five times annual compensation).
Common industries using executive life insurance include finance (Goldman Sachs), healthcare (HCA Healthcare), and technology (Apple Inc.).
What is an Executive Protector Life Insurance policy?
An executive protector life insurance policy is a type of permanent life insurance policy that provides financial protection for key personnel in an organization. It provides benefits to the family and business if the insured person dies or becomes disabled due to injury or illness. This type of policy is typically designed specifically for high-ranking…
See also Exemption eligibility, and Executive protection.