Section 79 Plan

What Does Section 79 Plan Mean?

A Section 79 plan is a type of life insurance offered as an employee benefit. It is an attractive option for businesses because the premiums are fully tax-deductible, provided the insurance coverage does not exceed $50,000 per employee. The cost per employee depends on age and the policy type, the same factors behind the average cost of life insurance for individual buyers.

Insuranceopedia Explains Section 79 Plan

Section 79 plans are an excellent way for employers to provide term life insurance as a benefit to their employees. Such plans can help companies attract top talent and improve employee retention rates. The employer chooses which insurer issues the policies under the plan, so it helps to research the top-rated life insurance companies before setting one up.

In many cases, employers can also offer permanent life insurance through a Section 79 plan. The plan derives its name from the section of the IRS code that governs it.