Group Term Life Insurance Alternatives
Group term life insurance above $50,000 requires an imputed income calculation that can be unfavorable toward executives. This fact, coupled with the temporary nature of group term life insurance, causes many companies to institute a Group Term Carveout or Group Term Overlay. These plans integrate with underlying Group Term Life Insurance Plans.
The Todd Organization can help to implement Group Term Life Insurance Plans that provide a more cost-effective method of delivering life insurance benefits to executives of the Company. These plans are intended to reduce the overall cost of life insurance for both the Company and the Executive while, at the same time, providing the eligible executive with more flexible life insurance options. To accomplish these objectives, typical plan designs will:
- Work in conjunction with the Company’s Group Term Insurance Plan.
- Replace the Group Term coverage, in excess of $50,000, with permanent insurance that allows for the accumulation of cash values.
- Allow the executive the flexibility (within guidelines) to choose the level of optional coverage.
- Minimize the medical underwriting requirements.
- Provide flexible post-retirement coverage.