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
Coverage in the event that stock sent to others for processing is damaged or destroyed en route or at their premises except those perils specifically excluded. For example, this coverage ...
Savings accounts that have tax advantages combined with health insurance plans for the benefit of the employee. Both the employee and the employer are permitted to contribute to the MSA. ...
Policy whose premiums, cash value, and face amount are guaranteed (all values are fixed and do not fluctuate according to the loss experience, expenses, and investment returns of the ...
Modified endowment insurance policy under which the insured receives one-half the death benefit as the maturity value of the policy. ...
Tax assessed by the states as a payroll tax on employers to pay for unemployment compensation ...
Insurance on the life of the employee, paid for by the company, with the company being the beneficiary under the policy. This insurance vehicle is being used more and more to fund ...
Section of the Internal Revenue Code that provides for SIMPLIFIED EMPLOYEE PENSIONS (SEP). ...
Same as term Graduated Life Table: mortality table that reflects irregularities from age to age due to chance fluctuations in the sequence of the rates of mortality. The rates of death as ...
Same as term Master policy: single contract coverage on a group basis issued to an employer. Group members receive certificates as evidence of membership summarizing benefits provided. ...
Have a question or comment?
We're here to help.