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
An exception to section 101 (a) (1) OF THE INTERNAL REVENUE CODE tax-exempt Status Of the DEATH BENEFIT in a life insurance policy where the transfer of the interest in the policy by the ...
Insurance company that does not utilize the rates and policies of a rating bureau. ...
Policy that pays a fixed dollar amount for each day the insured is confined to the hospital. This method of payment is in contrast with most other medical expense insurance that reimburses ...
Capacity of parties to an insurance contract to understand the meanings of their action in order for the contract to be valid. ...
Employer's obligation to fund a pension plan for the time period when employees were qualified to participate but the plan was not yet established. For example, a pension plan is ...
Record of losses, whether or not insured. This record is used in predicting future losses and in developing premium rates based on expectation of insured losses. ...
Special type of charitable remainder trust (CRT) under which a designated beneficiary (cannot be a charitable beneficiary) receives an annual fixed income. The grantor of the trust is ...
Insured, or an applicant for insurance, with lower expectation of incurring a loss than the standard applicant. For example, an applicant for life insurance who does not smoke can usually ...
Life insurance under which an insured receives the face value of a policy if the individual survives the endowment period. If the insured does not survive, a beneficiary receives the face ...
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