This CBC describes a financial technique used by high-end executives willing to reduce current compensation in exchange for tax free income in the future. Also known as a 401(k) Look-A-Like Plan, instead of funding with COLI (corporate-owned life insurance), the strategy uses EXOLI (executive-owned life insurance) funded by loans governed by IRC Section 7872. The plan produces huge benefits for executives as well as a positive impact on earnings for the sponsoring employer in all years (including year 1). The strategy is in full compliance with the Final Split Dollar Regulations issued in September 2003.
Use with the InsMark Leveraged Compensation System.
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