Avoiding a New Tax Trap in Business Owned Life Insurance

Cordell, David M.; Langdon, Thomas P.
January 2010
Journal of Financial Planning;Jan2010, Vol. 23 Issue 1, p34
Academic Journal
The article discusses topic related to the two major exceptions to income tax free life insurance death benefits in the U.S. It presents the two exceptions including the transfer for value rule and business owned life insurance (BOLI). It explains that the life insurance is one among the few assets that receives preferential treatment for tax purposes. The article also mentions the two death benefit taxation of employer owned policies that can be avoided including notice and consent requirement are met and if a safe harbor exemption exists.


Related Articles

  • Life Insurance Options, and What Lies in the Shadows. Katt, Peter C. // Journal of Financial Planning;Nov2011, Vol. 24 Issue 11, p32 

    The article presents the case of seniors Doug and Helen, who decided to purchase a life insurance worth 50 million dollars. It mentions that both of them have encountered several problems including the ability and experience of Marty, college roommate of Doug, to implement the program. It notes...

  • Philippines: Life grew 39%; non-life 8% in 2012.  // Asia Insurance Review;Apr2013, p17 

    The article focuses on the life insurance industry in the Philippines wherein its year-on-year premium income grew 39% to $3 billion for 2012 and is attributed to the robust sale of variable life insurance products.

  • Another solution offered for buy/sell problems. Meyers, Issy // National Underwriter / Life & Health Financial Services;9/6/93, Vol. 97 Issue 36, p9 

    Comments on a Producer's Ask article in the July 5, 1993 issue of `National Underwriter' about the problems associated with buy/sell plans favoring the surviving owner. Similar cases; Establishments of a partnership as a solution; Liquidation; Use of the survivor product; Tax advantages;...

  • Determining the Appropriate Amount of Life Insurance. Stevick Jr., Glenn E. // Advisor Today;May2007, Vol. 102 Issue 5, p24 

    The article discusses several approaches to determine the appropriate amount of life insurance for a client in the U.S. The financial-needs analysis approach identifies survivors' immediate cash needs and ongoing income needs, and assumes life insurance proceeds will be liquidated to meet them....

  • Survivorship Universal Life Insurance Illustrated Values.  // National Underwriter / Life & Health Financial Services;9/2/2002, Vol. 106 Issue 35, p20 

    Presents a chart illustrating survivorship universal life (UL) insurance policies in the United States. Current and guaranteed interest rate; Accumulated value, internal rate of return and death benefit by year 30; Premium; Platinum Survivor ultra from American General Life; Survivorship UL...

  • Survivorship Whole Life Insurance Illustrated Values.  // National Underwriter / Life & Health Financial Services;9/2/2002, Vol. 106 Issue 35, p24 

    Presents a chart illustrating survivorship whole life insurance policies in the United States. Accumulated value, internal rate of return and death benefit by year 20 and 30; Endowment period; Premium; Level Premium Estate Protection from John Hancock Life; Joint CompLife from Northwestern...

  • Alternative GMDB Riders: A Solution For VUL Death Benefit Sales. Lakenbach, Cary // National Underwriter / Life & Health Financial Services;4/9/2001, Vol. 105 Issue 15, p18 

    Suggests an alternative guaranteed minimum death benefit (GMDB) rider for variable universal life insurance death benefit sales. Effect of the alternative GMDB rider on non-variable universal life products; Factors to consider in designing an alternative GMDB rider.

  • Double taxation convention: meaning of 'profits'.  // Accountancy;Mar1968, Vol. 79 Issue 895, p186 

    The article focuses on the tax case concerning a taxpayer company based in Great Britain but received dividends from subsidiaries in North America. Under the double taxation conventions between Great Britain and the U.S., the taxpayer is entitled to credit against his Great Britain income tax...

  • A New Life for Life Settlement Deals. Colomer, Nora // Investment Dealers' Digest;11/6/2009, Vol. 75 Issue 42, p25 

    The article discusses the life settlement deals for the financial services industry in the U.S. It cites that the life settlement refers to senior settlement, a senior life settlement and a viatical settlement as it sells a life insurance policy. On the other hand, life settlement...


Read the Article


Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics