Qualified Life Insurance
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Qualified Life Insurance. High early cash values Year 1 cash value up to 80% of 1 st year premium Competitive premiums 401(k) and “cash balance ” plans. Policy Form 2098-U; ICC08-2098-U. Effective broad premium range Strong term and endowment solves

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High early cash values

Year 1 cash value up to 80% of 1st year premium

Competitive premiums

401(k) and “cash balance” plans

Policy Form 2098-U; ICC08-2098-U

Effective broad premium range

Strong term and endowment solves

Excellent guaranteed cash values

Attractive target premiums

401(k) and Traditional DB plans

Policy Forms2099-U, ICC08-2099-U

Survivor benefits for specialty retirement plans

Insured 430(d) and 412(e)(3).

Split funded plans with flexible premium annuity riders

Life insurance in q plans
Life Insurance in Q-Plans

  • Profit Sharing & 401(k) plans

    • Aged Money Rules

  • Defined Benefit plans

    • Increases contributions

  • Cash Balance & 401(k) combo plans

    • Life in CBP => No aggregation

Incidental limits
Incidental Limits

Defined contribution plans

< 25% of cumulative contributions for UL

< 50% of cumulative contributions for WL

Defined benefit plans

100 times the expected monthly benefit

Rev. Rul. 74-307 (duplicates DC rule)

Reasons to include life insurance in a qualified plan
Reasons to Include Life Insurance in a Qualified Plan

  • The life insurance premium is tax deductible, even when the participant receives a substandard rating

    • Compared with buying life insurance outside of the plan, you can get more coverage from the same out-of-the-pocket expense or the same coverage for less.

    • In a Defined Benefit plan, a large deductible premium results in the government, in effect, subsidizing the substandard rating.

    • Plan life insurance saves the employee the personal premium expense.

Reasons to include life insurance in a qualified plan1
Reasons to Include Life Insurance in a Qualified Plan

  • Life insurance paid from the qualified plan is estate tax exempt if paid to the spouse using the unlimited marital deduction.

  • Income-tax-free death benefit proceeds, the net amount at risk is income-tax free.

  • Life insurance creates a larger deduction in Defined Benefit plans.

  • Life insurance in a qualified plan is generally protected from creditors.

Qualified plan life insurance exit strategies
Qualified Plan Life Insurance Exit Strategies

  • Five possible outcomes

    • Death of participant while policy is in plan

    • Surrender of policy by plan

    • Distribution of policy to insured participant

    • Sale of policy to participant

    • SML’s Net Amount At Risk Exchange Rider

Easy issue program
“Easy Issue” Program


  • No added loads or fees

  • No automatic blood/urine/exam

  • Simplified application (6 questions)

  • No reduction in the dividend scale

Easy issue

“Easy Issue”

Simple Rules:

At least five policies must be issued under the plan.

Maximum age 60

The case must meet the participation requirements in the following table.

Simplified underwriting maximums
Simplified Underwriting Maximums

  • $500,000 Maximum: Standard – Table 4, flat extras through $10.00 permanent.

  • $320,000 Maximum: Table 5 – Table 12, flat extras of $12.50 - $30.00 permanent.

  • $120,000 Maximum: Table 16, flat extras of $40.00 or more permanent.

  • Maximum Face Amount per participant will be based on the incidental death benefit rules applicable to Qualified Plans.

We do it all


Advanced Marketing Support

Plan Consultation


Client & CPA

Life Insurance Products & Service


Plan Documents

Plan Administration

Tax Reporting

Advanced Plan Design

Super Comp.

DB & 412(e)(3) Conversions

Cash Balance Plans

We Do it All!