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
Coverage in which an applicant lot required to take a medical examination, instead answers written questions to ascertain his current physical condition. ...
In life insurance, action by an insurance company canceling premium payments by an insured who has been disabled for at least six months. The policy remains in force and continues to build ...
State plans that provide health insurance coverage for those who are unable to purchase medical insurance. Coverage is provided by a specially formed nonprofit-making pool comprised of all ...
In property and casualty insurance, contract section containing such information as name, description, and location of insured property; name and address of the insured; period a policy is ...
Principle that holds that social insurance programs should be for the benefit of lower socioeconomic segments of society and not for that segment of society that does not require financial ...
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 ...
Time limit on the deferred ownership of property such that, 21 years after the property owner dies, the deferred ownership of that property terminates. ...
Maximum sum of money that the insurance company will pay, during the time interval that the product liability insurance coverage is in effect, for all product liability-related claims ...
Procedure in which a home office interviewer (who may or may not have underwriting experience) interviews applicants on the telephone. The questions asked the applicant are automated and ...
Have a question or comment?
We're here to help.