When an employer offers an employee a wage increase equal to the new life insurance policy's premium, what is this called?

In the context of life insurance, when an employer provides a wage increase that is equivalent to the premium of a new life insurance policy for an employee, this scenario is referred to as an executive bonus. This arrangement is often utilized to incentivize and reward key employees, making it a valuable tool for both employee retention and motivation.

An executive bonus serves as a way for organizations to offer fringe benefits while also allowing employees to enjoy tax advantages associated with life insurance. The employer typically pays the premium directly or gives the employee a bonus that covers the premium cost. This setup is beneficial for the employee because they receive additional compensation in the form of insurance coverage, which can provide financial security to their beneficiaries upon their death.

In summary, the executive bonus is a strategic compensation method that aids in attracting, retaining, and rewarding top talent within a company while simultaneously providing valuable benefits to employees.