A Section 412(i) plan is a qualified defined benefit retirement plan providing current tax deduction for all contributions. It is especially useful to highly compensated owners and executives of closely held businesses because it allows for very high tax deductions. Section 412(i) plans are referred as a "fully insured" plan because benefits are guaranteed by an insurance company. Other benefits include protection from creditors and possible gift and estate tax leverage. In addition, a 412(i) plan is not subject to many of the requirements that have made traditional defined benefit plans unpopular over the years.
Section 412(i) plans can represent a significant revenue source for the financial professional. Average commissions on plans that include life insurance exceed $50,000. An ideal client will meet the following criteria:
- » At least 45 years old
- » A minimum of $100,000 contribution every year
- » 5 or fewer employees
- » Contributions for at least 5 years
- » A life insurance need (preferred but not required)
Contact us to learn more about Section 412(i) plans and opportunities, and how Provada can work with you with this exciting concept.
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