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tax free until the account holder retires after age 59'A. At that time, taxes must be paid on the earnings as money is withdrawn from the account.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
Publication that lists premiums charged for products sold by an insurance company. A manual also has underwriting guidelines for agents. A life insurance rate manual includes minimum ...
Coverage for crops in the event of loss or damage by insured perils including hail, fire, and lightning. Prior to the passage of the Federal Crop Insurance Act in 1938 it was virtually ...
Maximum amount of insurance coverage that an underwriter will write on a particular class of property or risk exposure. ...
Additional amount of surplus from an additional amount of capital necessary to act as a supplement to the cash flow in the event unforeseen contingencies occur that disrupt or impair the ...
Pension funding agreement under which funds paid into a retirement plan are not currently allocated to purchase retirement benefits. The funds of one plan can not be commingled with funds ...
Layman description of the key features and benefits of a pension plan that must be filed with the Department of Labor. Periodic updates of this summary must also be provided to the ...
Damaged insured property in receipt by the insurance company resulting from abandonment and salvage, subrogation, and reinsurance. ...
Replacement for the earlier Family Automobile Policy (FAP) with these nine basic coverages: Coverage A Liability, The company pays damages for which an insured becomes legally obligated ...
Tax-exempt entity as qualified under Section 501 (c)(9) of the Internal Revenue Code. The VEBA usually provides its members and their dependents and beneficiaries with paid life insurance, ...
Have a question or comment?
We're here to help.