Tax Deferral
Postponement of taxes on investment or other earnings until the investor begins to consume them and anticipates being in a lower tax bracket. One example of a tax-deferred investment is an individual retirement account (IRA). Earnings accumulate tax free until the account holder retires after age 59'A. At that time, taxes must be paid on the earnings as money is withdrawn from the account. Other examples of tax deferred investments are insurance products such as annuities and various types of whole life insurance such as variable life and universal life. The tax reform act of 1986 limited the use of IRAs, making insurance products one of the few tax-deferred investments still available.
Popular Insurance Terms
Homeowners policy to cover the owner of a townhouse. ...
Entitlement to pension benefits without a reduction, even though an employee is no longer in the service of an employer at retirement. For example, under the ten year vesting rule, an ...
Central computerized facility that keeps on file the health history of the applicants for life and health insurance with member MIB companies. For example, the health record of an applicant ...
Provision in almost all excess of loss reinsurance contracts under which payment is made by a re insurer of each and every loss incurred by the cedent in excess of a specified sum, up to a ...
Legislation mandating that factors taken into account in the calculation of premium rates for automobile insurance include the insured's driving record, annual miles driven, and years of ...
One of four SEC divisions that enforces the federal securities laws in federal courts and before SEC's administrative law judges by bringing actions for violations. ...
Option under a participating life insurance policy in which dividends are left on deposit with the company to accumulate at a specified interest rate. If this option is chosen, it is ...
Inverse of the actuarial present value of a life annuity, taking the employee's life expectancy into account, to commence income payments at the normal retirement age of the employee. It is ...
Method of funding a pension plan under which a single premium payment is made to fund a single unit of benefit for one year of recognized service with the employer. For example, if the ...
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