KEYWORDS | TỪ KHÓA

A buy-sell funding arrangement in which owners purchase life insurance on one another and use proceeds to buy the deceased owner’s interest.

The amount payable under a life insurance policy upon the insured’s death, subject to policy terms.

A distribution that may be paid on a participating policy; it is generally treated as a return of premium up to the policyowner’s basis.

A buy-sell funding arrangement in which the business owns policies on owners and uses proceeds to redeem the deceased owner’s interest.

Cash available to meet estate-related expenses or obligations without forcing immediate sale of illiquid assets.

Life insurance used by a business to protect against the financial loss associated with the death of a key employee; the business typically owns the policy, pays premiums, and is beneficiary.

A life insurance policy that fails the federal 7-pay test and receives different tax treatment for distributions.

A retirement or executive benefit arrangement that does not receive the same qualification treatment as a qualified retirement plan.

A loan available from the cash value of a qualifying life insurance policy; outstanding loans and interest reduce available proceeds.

The policyowner’s investment in the contract used in determining tax treatment of certain distributions.

An employer retirement plan operating under federal tax and retirement-plan rules and meeting applicable qualification requirements.

Life insurance proceeds left with the insurer under a settlement arrangement; interest paid on retained proceeds can be taxable.

An individual retirement account funded with after-tax contributions that can provide qualified tax-free distributions.

An individual retirement account that may allow deductible contributions depending on eligibility, with taxable distributions generally occurring later.

The process by which a participant gains nonforfeitable ownership rights in retirement-plan benefits according to plan rules.