412(e)3 Qualified Plan

412(e)3 is a Defined Benefit Plan that is funded using life insurance company products that have guarantees. The plan provides guaranteed retirement benefits and may also include an insured death benefit. The maximum contributions and tax deductions will be greater than is permitted in other Defined Benefit plans. As required by the IRS, these plans also provide a survivor death benefit.

What is a Defined Benefit Plan?

Defined Benefit plans are tax qualified retirement plans under Internal Revenue Code Section 401. As with other types of qualified plans, contributions made by employers are tax-deductible, and participating employees pay no current tax on contributions and earnings until the funds are distributed.

Defined Benefit plans are most suitable for stable, well-established businesses or professional practices. Moreover, because they can provide more substantial retirement benefits and greater tax deductions than other types of plans, Defined Benefit plans are usually favored by older or highly compensated owners and employees.

For more information: 412(e)3 Qualified Plan


Guarantees are dependent upon the claims-paying ability of the insurer.