By offering your key employees an insurance-based income solution, you’re potentially providing life insurance protection and the opportunity to accumulate supplemental retirement income.

Potential employer benefits

  • Death benefit guarantees provide basic life insurance protection, and the income tax-free death benefit transfers wealth to beneficiaries
  • No contribution limits1
  • Tax-free income is available through loans and partial withdrawals
  • The employee owns the life insurance policy and possesses all control regarding accessing cash value, naming a beneficiary and making investment choices

Potential employee benefits

  • There’s no impact on existing qualified plans
  • Can be structured as a group benefit without formal plan requirements
  • Can be structured as a group benefit with no administration or recordkeeping
  • There are no out-of-pocket expenses associated with offering this plan

Use these life insurance options to fund an IBIS

IBIS case study

Here’s how it works. Check out this case study to see how IBIS can work for a business and its employees.

[1] Access to cash value assumes the contract qualifies as life insurance under Internal Revenue Code (IRC) Section 7702. Most distributions are taxed on a first-in/first-out basis if the contract remains in force and meets the non-MEC (modified endowment contract) definitions of IRC Section 7702A. But if it is a MEC, then any distributions taken from the policy will generally be taxable and subject to a 10% penalty tax if the policy owner is 59½ or younger. If loans or partial surrenders are taken, the death benefit payable to beneficiaries will be reduced. Surrender charges may apply for early surrenders and partial surrenders. Surrenders may be subject to income tax.