Voluntary Employees Beneficiary Association (VEBA)
Definition of "Voluntary employees beneficiary association (VEBA)"
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, health insurance, and accident insurance. The VEBA can be established by any employer for employees even if they already have a retirement plan. Employers are permitted to make tax-deductible contributions to the VEBA that is usually established as a trust with the bank acting as a trustee. Earnings build within the trust on a tax-deferred basis. If the VEBA should terminate, all of the VEBA's assets are distributed to the active participants in the VEBA as of the date of termination. Distributions to a VEBA participant are not required to begin by age 70M, nor is a penalty charged if the distributions begin prior to age 5914. Survivor benefits are received on an income and estate tax-free basis. Assets of the VEBA are exempt from creditors' claims. The IRS code requires that the VEBA must have at least two participants (one of the participants can be a spouse); benefits must be based on annual compensation as well as age; and all full-time employees who are at least age 21 and have at least three years of full-time service must be allowed to participate. The employer can terminate the plan at any time.
Popular Insurance Terms
Form that provides insurance coverage for the insured in the event the damage or destruction of non-owned property reduces or terminates the insured's earnings. For example, if the insured ...
Immediate taking-into-account of present interest rates, mortality experience, and expenses in premiums currently charged. This is critical to the formulation of current assumption whole ...
Coverage for an insured in the event that he writes and publishes libelous statements and the injured party brings suit against the insured. ...
Exposures usually excluded from life and health insurance, or subject to a maximum limit if covered. ...
Representative of an insurance company in soliciting and servicing policyholders. An agent's knowledge concerning an insurance transaction is said to be the knowledge of the insurance ...
Method of setting a dollar value on loss suffered by an insured. In some cases, a loss is straightforward, such as the cost of gallbladder surgery. But with burglary of a home or a traffic ...
Insured whose rights against a third party are transferred to an insurance company (the subrosee) according to the process required by the subrogation clause in the policy. ...
Special endorsement to personal automobile policy (pap) covering loss of records, tapes, and other sound equipment caused by an insured peril in an insured automobile. ...
Same as term Excess of Loss reinsurance: method whereby an insurer pays the amount of each claim for each risk up to a limit determined in advance and the reinsurer pays the amount of the ...
Have a question or comment?
We're here to help.