Cash value life insurance — a permanent solution

Employers can use a variety of approaches to meet executive benefit needs, but permanent life insurance is recognized as the most appropriate funding vehicle because:

• The beneficiary — either the corporation or employee's survivor — receives the policy's cash value and coverage amount income tax-free.

• Death benefits can be used to fund other cash flow needs.

• All investment earnings grow income tax-deferred inside the program.

• Money can be withdrawn before age 59-1/2 without an IRS penalty and without a surrender charge.

• Money can be moved among investment subaccounts without creating a taxable event.

• All premiums paid — including those which pay for current life insurance protection each year — become part of the policy's cost basis when determining the taxable amount of any future withdrawal.

For innovative ideas on using group life insurance to structure or fund executive benefits programs, contact your Minnesota Life Group Life sales manager or Ed Eller, national sales manager, Universal Life products.

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