Tax Reform Act Of 1984
Legislation that raised taxes on life insurers and further defined life insurance. Because the tax equity and financial responsibility act of 1982 and 1983 (TEFRA) failed to raise the amount of revenue the U.S. Treasury wanted, the 1984 Act again raised the corporate tax on life insurance companies. It also expanded the definition of life insurance to all life insurance contracts, rather than just those with flexible premiums that had been addressed in the Tax Reform Act of 1982. For flexible premium contracts, the 1982 Act established the death benefits had to represent a certain percentage of the cash value, which declined as the policyholder got older. The 1984 Act raised that ratio. For example, at age 40, the death benefit must be at least 250% of cash value for the product to qualify as life insurance. This act also attempted to redistribute the tax burden between mutual and stock life insurance companies. It also replaced a three-tier structure for taxing life insurance companies with a single-phase structure.
Popular Insurance Terms
Life insurance on which a premium is collected on a weekly, bi-weekly, or monthly basis, usually at the home of a policyholder. The face value of the policy is usually $1000 or less. ...
Period of time an insured is sick and entitled to receive health insurance benefits. ...
Same as term Credit Card Insurance: coverage under a homeowners insurance policy in the event that a credit card is fraudulently used or altered. Fraud includes theft and the unauthorized ...
Statistical procedure used to calculate a premium rate based on the loss experience of an insured group. Applied in group insurance, it is the opposite of manual rates. Here the premiums ...
Same as term Unallocated Funding Instrument: pension funding agreement under which funds paid into a retirement plan are not currently allocated to purchase retirement benefits. The funds ...
Three types of damages can be awarded to a plaintiff: Special Damages reimbursement for out-of-pocket expenses, including medical bills, legal charges, cost of repairing damaged or ...
Correction of a contract containing a mistake in order to prevent a party to that contract from gaining from that mistake. For example, if $1,000,000, instead of the correct amount of ...
Cost computation form that assumes retirement and commencement of annuity payments on the first day of the month nearest the birthday when a retiree reaches normal retirement age. Most ...
Act that provides new funding for the Bank Insurance Fund and enhances the safety and soundness of the financial system. The FDICIA includes the Foreign Bank Supervision Enhancement Act ...
Have a question or comment?
We're here to help.