Under this plan, death benefits
and cash values fluctuate according to the investment experience of the company managing the account.
If a policy is classified as an MEC, it is life insurance nonetheless, and the death benefit
remains free of income tax (or should, if you've planned properly).
Age 121/Lifetime Death Benefit
Guarantees; Estate Liquidity Rider
Life insurance is an extremely efficient way to finance executive benefit plans because earnings are tax deferred, death benefits
are tax-free and unrealized gains on insurance cash values are booked annually.
Some brokers may automatically ask for a specific death benefit
guarantee period before fully understanding the client's need, the potential value, and the potential risk associated with shorter duration guarantees.
The death benefit
disburses the greater of remaining account value or premiums less withdrawals.
Subsequently, X issued a check payable to A, as executrix of the estate, representing the pre-retirement death benefit
, less 10% withheld as Federal income tax.
In addition to traditional death benefits
, such policies provide "living benefits" that help policyholders deal financially with medical care and long-term-care costs.
Flexible Death Benefit
Guarantee to Lifetime; Low Premium to Endow; Rolling Targets; No Tobacco Use Incentive