Employers typically opt for traditional options such as 401ks or pensions. However, an increasingly popular choice is to provide a cash value life insurance policy as a sponsored retirement program. Not only does this option offer unique benefits for both the employer and employee, but it can also be an attractive alternative to more traditional retirement accounts.
One of the primary benefits of a cash value life insurance policy as a sponsored retirement program is that every dollar contributed is tax-deductible. This means that the employer can receive a tax break for contributing to their employees' retirement savings. Additionally, contributions to a cash value life insurance policy are not subject to the same limits and restrictions as 401ks, making it an attractive option for high earners.
Another significant advantage of a cash value life insurance policy is that there are no hidden fees or costs associated with the plan. Traditional retirement accounts such as 401ks often require annual maintenance fees or mandatory testing fees imposed by the IRS, which can add up over time. By contrast, a cash value life insurance policy as a sponsored retirement program is designed to be simple and straightforward, with no hidden costs or fees.
Perhaps the most significant benefit of a cash value life insurance policy as a sponsored retirement program is that the employer is in complete control of the plan. This means that the employer can choose when and how their employees can access their funds, offering a level of flexibility and customization that is not available with traditional retirement accounts. This can be particularly attractive for employers who are looking to build loyalty and incentivize their employees to stay with the company long-term.