Which of the following roles does the executive play in an Executive Bonus plan?

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In an Executive Bonus plan, the policy owner is typically the employer or the company offering the plan. This arrangement allows the employer to provide a valuable benefit to the executive, such as a life insurance policy, as a part of their compensation package. Since the employer owns the policy, they have the authority to make decisions regarding the policy, including naming the beneficiary and determining the terms of the coverage.

The employer pays the premiums on behalf of the executive, which is often considered a bonus or additional compensation. This setup also offers potential tax advantages for the employer and the employee. Ultimately, the ownership of the policy by the employer demonstrates how the Executive Bonus plan functions as a form of employee benefit aimed at attracting and retaining key executives within the organization.

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