Insurance Planning.

This article discusses the use of life insurance in restricted executive bonus management when establishing a financial plan for retaining quality employees. This restricted executive bonus arrangement operates like a Bonus 162 plan which can control an employee's access to policy cash values. The arrangement has three components: First, the Bonus 162 plan which allows discriminatory selection of the employees who will receive this benefit and allows an employer to determine how large the bonus will be. The second component is the restrictive endorsement which is executed by the employer and employee and filed in the insurance company. The third instrument is a separate legal agreement between the two parties.