Employer Life Insurance Memphis TN

Most group-term policies offer either a set amount of insurance (for example, a $10,000 policy for each employee) or are based on the employee's salary (for example, policy values of one, two, or three times the employee's yearly salary). In some cases, you can allow employees to purchase life insurance in $1,000 increments, the cost of which is based on their age.

Your business offers life insurance that can be purchased in $1,000 increments. The insurance vendor gives you the following rate schedule per thousand dollars of coverage purchased. Employees under 30 pay $.20 per thousand per month; employees 30 - 40 pay $.22 per thousand per month; and employees 40 - 50 pay $.30 per thousand per month. Carl, age 27, wants to purchase $5,000 of life insurance. He will have to pay 5 times $.20 = $1.00 per month for his insurance. Janet, 30, will have to pay 5 times $.22 = $1.10 for the same amount of coverage.

Watch out for the $50,000 threshold. The cost of employer-provided group-term life insurance in excess of $50,000 is taxable to employees. That means that if you pay the premiums for employees' life insurance, any premiums you pay for more than $50,000 in coverage for one employee count as taxable income for that employee. Not only will the employee pay income taxes on it, you'll both have to pay payroll taxes on it as well.

Sports Heaven, Inc., pays the premiums on a $120,000 group-term life insuran...

Life insurance is among the most useful, and most maligned, of all things that you will ever buy. If properly fitted to your needs and offered at a competitive price, life insurance offers important advantages, including:

• income replacement for your survivors
• investment/forced savings for you
• reduced income and transfer tax liability
• a ready source of cash at a time when it's likely to be needed most
• funding of small business buy/sell agreements

So, if life insurance can offer all of the above advantages, why aren't there long lines of people outside their insurance agent's office, demanding to buy more? Probably because people fear that one or more of following scary things may come true:

• the policy will be overpriced when compared to similar policies offered by other companies
• the policy will offer poor investment returns
• the policy will not enjoy all possible tax advantages
• the policy will not function as planned to facilitate a buy/sell agreement
• the policy will be sold by an unethical insurance agent who will try to sell the individual the highest premium policy possible, whether it meets the individual's needs or not

Besides these possible disadvantages, there are some human factors that also sometimes keep people from buying needed life insurance:

• by their nature, life insurance policies require current outlay for an expected advantage in the future (which may never be seen by the policyholder, only his or her beneficiaries)
• many...

Of the various types of trusts, this one is concerned with wealth generated after death. Ordinarily, the face value of life insurance is included in the taxable estate of the owner of the policy. This can represent a significant source of estate taxes .

However, you can create a special type of trust that eliminates estate taxes on the life insurance benefits because the trust, and not you, will be deemed to be the owner of the policy.

It is usually desirable to establish the life insurance trust first, and then have the trust purchase the policy in its own name. The trustor funds the trust, which in turn, purchases the policy in its own name, and pays the policy's premium against its own account. An independent trustee is absolutely required in this case.

It is possible to transfer an existing life insurance policy to such a trust; for example, where the trustor is older or has health problems that make a new life insurance policy cost-prohibitive. However, caution must be exercised so that the trustor irrevocably relinquishes to the trust absolutely all control over the policy. An estate planning attorney can ensure this is done properly.

The idea is that the trust takes over ownership of the policy; the trustor then makes contributions to the trust, which, in turn, uses the contributions to pay the policy's premium against its own account....