Nonqualified Plan
Employee benefit plan that does not have the federal tax advantages of a qualified pension plan, in which employers receive a federal tax deduction for contributions paid into the plan on behalf of their employees. For an employer, not having a tax deduction can be a serious disadvantage, but a nonqualified plan has these advantages:
- otherwise discriminatory coverage for some employees is allowed.
- benefits can be allocated to certain employees whom the employer wishes to reward. The result could be that the total cost of the benefits for a particular group of employees may be less under a nonqualified plan than for all employees under a qualified plan.
Popular Insurance Terms
Portion of reinsurance premium received by the reinsurer that relates to the unexpired part of the reinsured policy. ...
Income (premiums + investment earnings) minus disbursements (dividends + death claims + policies surrendered for benefits + general expenses). ...
Present value of future benefits. This type of reserve would be applicable for single premium life insurance, paid-up insurance, single premium annuity, and a paid-up annuity. ...
Legislation passed in 1988 by the U.S. Congress to facilitate movement of checks through the collection system. As the result of this Act, the Federal Reserve has established rules for the ...
Property damage coverage for a vehicle under the collision insurance and comprehensive insurance sections of the business automobile policy (BAP) and the personal AUTOMOBILE POLICY (PAP). ...
Assumption that an employer is liable for negligent acts or omissions of employees that result in bodily injury and/or property damage to third parties if those acts are in the course of ...
Model state statute that governs terms for surrender of individual deferred annuities and cash value life insurance. This model, adopted by most states in the late 1970s and early 1980s, ...
Amendment that modifies the federal flood insurance program by providing relocation and acquisition coverage for structures in imminent danger from an encroaching shoreline. This amendment ...
Federal agency that collects and analyzes numerous U.S. demographics used by government and industry. Insurance companies use the demographics to predict areas of high demand for their ...
Have a question or comment?
We're here to help.