Tax Reform Act Of 1984
Definition of "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
Tables used to determine the present value of a sum in the future by taking into consideration the assumed interest rate and time period involved. ...
Coverage under which initial premiums are less than normal for the first few years, then gradually increase for the next several years until they become level for the duration of the policy. ...
Act in which volunteers of nonprofit organizations and government entities do not incur liability if they are acting within the scope of their volunteer activities, their actions do not ...
Coverage against foreign country expropriation underwritten by the overseas private investment corporation (OPIC) for U.S.-owned companies investing in given developing countries. ...
Excuses raised by a defendant in a negligent suit (unintentional tort). There are three basic defenses to unintentional torts or negligence. ASSUMPTION OF RISK an individual (plaintiff), by ...
12-month period from the date of issue of a policy as stated in its declarations section. ...
Quality of investments of insurance companies. State insurance regulators establish rules for company investments. Authorized investments vary, depending on whether a company is a life ...
Amount of required capital that the insurance company must maintain based on the inherent risks in the insurer's operations. These risks include asset depreciation risk, credit receivables ...
Loan under which the owner of a home receives the equity in the form of a series of monthly income payments for life. Upon the owner's death, the lender institution (usually a bank) gains ...
Have a question or comment?
We're here to help.