Typical life insurance planning mistakes and some suggested solutions

Article Abstract:

The author discuss frequent mistakes which occur during the planning for life insurance and its taxation and offer recommendations for correcting or avoiding these mistakes.

United States, Management, Tax planning

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Avoiding common mistakes in the use of life insurance

Article Abstract:

Individuals should seek the advice of life insurance professionals and other professionals to determine whether certain forms of life insurance are truly appropriate for their particular situation. There are a number of legitimate reasons for purchasing life insurance, including income replacement and payment of estate taxes and expenses. Individuals should be wary of corporate-owned life insurance, split-dollar insurance, survivorship insurance and third-party life insurance. These policies serve specific purposes but do not address all estate planning needs.

Estate tax, Estate taxes

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Reverse split-dollar life insurance: what are the tax effects?

Article Abstract:

Levelizing P-58 or one year term costs to determine cash values accruing in a reverse split-dollar life insurance arrangement should be considered an aggressive tax position, particularly since the IRS has not ruled on the use of reverse arrangements in the employer-employee context. The only reverse split-dollar ruling was on a policy between husband and wife, so taxability of compensation was not an issue. The IRS has indicated that taxation of traditional split-dollar arrangements would apply to arrangements taking some other form, but reverse plans do raise questions not yet addressed.

Taxation, Employee benefits, Split-dollar life insurance, Split dollar life insurance

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