Who is the owner of the policy and pays the premium in an Executive Bonus plan?

In an Executive Bonus plan, the executive is both the owner of the policy and responsible for paying the premiums. This arrangement allows the company to provide a financial benefit to a key employee by using bonuses to fund a policy that the executive owns. When the executive owns the policy, they have control over the benefits and the ability to designate beneficiaries. This structure is advantageous for the executive, as it can be a way to enhance their compensation package while also offering certain tax benefits related to personal ownership of the insurance policy.

The alternative options describe different ownership and premium payment scenarios that do not align with how an Executive Bonus plan is structured, which emphasizes the executive's direct involvement and ownership in the policy.