When a life insurance policy is purchased as an executive bonus, to whom does the policy belong?

When a life insurance policy is purchased as an executive bonus, the policy belongs to the employee. In this arrangement, the employer offers a life insurance policy to an employee as a supplemental benefit to their compensation package. The employer pays the premium for the policy, but ownership is transferred to the employee. This means that the employee has control over the policy, including rights to name beneficiaries, access cash value, and make policy changes.

This structure provides the employee with a valuable benefit that they personally own and can retain even if they leave the company, which adds to the incentive for the employee to remain with the organization. The executive bonus arrangement is a method for attracting and retaining top talent within a business while also giving the employee valuable life insurance protection.