If the plan provides group term life insurance
that is discriminatory, the exclusion is not available to key employees.
Group term life insurance
must meet four basic requirements:
Cost of Group Term Life Insurance
in Excess of $50,000 Employee's Date of Birth: January 1, 1955 (Age: 52) End Employer's Taxable Year: Calendar Employee's Contribution: $0 Employee's Tax Bracket: 28.00% Level Amount of Group Insurance: $150,000 Cost of Group Term Insurance: $276 Estimated Tax on Term Group Insurance: $78 Assume further that the employee contributes 15<J per month per $1,000 of insurance.
The employer provides her with $150,000 of group term life insurance
. She makes no contribution to the coverage.
Consequently, corporations use executive life insurance arrangements to overcome group term life insurance
SDLI Arrangement Defined--Under these proposals, an SDLI arrangement is defined, generally, as any arrangement that is not part of a group term life insurance
plan described in IRC Sec.
* An employer who wants to provide permanent coverage for selected employees and recognizes the inherent disadvantages with using some form of group term life insurance
plan, both from the non-discrimination-in-coverage requirements as well as the concern about loss of coverage for employees when retirement age is reached.
Insured employees must file an IRS PS-58 on their annual W-2 tax form -- meaning employees must report a small portion of taxable income if the firm's group term life insurance
premiums top $50,000, Ervin said.
Employers are also permitted to make contributions to medical savings accounts (MSAs) and provide a limited amount of group term life insurance
as well as provide certain fringe benefits (such as free employee parking).
You can't name your own price for group term life insurance
yet, but Group Life.com Inc.
Recently, the utility discovered an affordable group term life insurance
plan for lower-level employees, and began offering it three months earlier in order to retain key workers such as David, who have critical expertise and skills.
Options include major medical insurance, disability income insurance, group term life insurance
, dental insurance, group accidental death and dismemberment insurance, Section 125 plans, and retirement programs.