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Article: Tax law changes can affect life insurance decisions. (Personal Finance).(Brief Article)
- Article from:
- Healthcare Financial Management
- Article date:
- July 1, 2002
- Author:
CopyrightCOPYRIGHT 2002 Healthcare Financial Management Association. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) can dramatically affect life insurance plans. A 12-month repeal of estate taxes that will take place in 2010 will affect plans made now by many life insurance policyholders (see HEALTHCARE FINANCIAL MANAGEMENT, May 2002, pp. 90-94). Assume, for example, Mary has an irrevocable life insurance trust that has owned a whole-life policy for several years. The policy has a fixed premium, and dividends are being used to purchase paid-up additions that increase the death benefit. The insurance company's most recent "in-force" illustration projects that several more premiums will be required before the policy ...