A fringe benefit primer for the closely held C corporation.(part 2)

Tax Adviser, The, November, 2004 by Altieri, Mark P.

In many circumstances, key employees of closely held C corporations can be compensated with salary and other benefits not granted proportionately or equivalently to other employees. Part I of this article, in the October 2004 issue, examined salaries and bonuses, interest-free loans and health and disability insurance. Part II, below, discusses the characteristics, advantages and disadvantages of group-term life insurance, split-dollar life insurance and nonqualified deferred compensation.

Group-Term Life Insurance

Employers and key employees should normally consider group-term life insurance as an insurance option, because the premiums are generally fully deductible by the employer and partially or fully excludible by the employee. Although the...