Tax Deferral
Postponement of taxes on investment or other earnings until the investor begins to consume them and anticipates being in a lower tax bracket. One example of a tax-deferred investment is an individual retirement account (IRA). Earnings accumulate tax free until the account holder retires after age 59'A. At that time, taxes must be paid on the earnings as money is withdrawn from the account. Other examples of tax deferred investments are insurance products such as annuities and various types of whole life insurance such as variable life and universal life. The tax reform act of 1986 limited the use of IRAs, making insurance products one of the few tax-deferred investments still available.
Popular Insurance Terms
Ruling issued in 1988 by the Internal Revenue Service that stipulates that, when computing the pension benefits of an employee still working after 1987, the years of service on the job ...
Same as term Direct Response Marketing: method of selling insurance directly to insureds through a companies own employees, through the mail, or at airport booths. The company uses this ...
Employer, association, labor union, or other group ...
Use of new rate structures by an insurance company without first obtaining approval of a State Insurance Department. ...
Land and attached structures. Interest in real estate can be protected through various insurance policies. ...
Variable-rate bonds whose coupon and value increases as interest rates decrease. ...
Employer sponsored retirement savings program named for the section of the Internal Revenue Code that permits it. These plans allow employees to invest pre-tax dollars that are often ...
Federal legislation requiring employers with traditional health plans to also provide an HMO to its employees. The act also makes it mandatory for employers to contribute as much to the HMO ...
Procedure for calculating the cost of life insurance, taking into account the time value of money (investment return on sums placed in premium dollars had these sums been invested ...
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