The annuities in question were nonassignable, and possession was retained by the employer until taxpayer reached age of retirement; and the employee's compensation was not reduced during these years, nor did he have election to receive in cash the amount paid.
Due to the declining present value of future money, a taxpayer pays less in taxes if he can defer his tax payment.
In the case of this endowment policy:
If the Premium = $B, the [lump sum] will be $[B*(1+i)^Y].
If deferral is permitted, the executive's tax savings = (marginal rate R)*[lump sum]
Reasons in favor of deferral: it was issued to the company in the interim; and, unlike the stock bonus above, his rights are nonforfeitable: he can't sell/borrow against it, nor can he be denied it by being fired.
Reasons against deferral: it names him as the beneficiary; he should feel better off at issuance—and he certainly consented to the policy purchase in lieu of salary (e.g. as consideration).