What is Executive Group Life insurance?
Executive Group Life (EGL) is group life insurance coverage designed to help executives and other senior professionals by providing a generally income-tax-free death benefit for their beneficiaries, as well as the opportunity to accumulate account value to meet future needs. Executive Group Life insurance enables most employers to enhance their executive benefits while still minimizing overall benefit costs.
How is Executive Group Life insurance used?
You, as the employer, can use Executive Group Life insurance to help gain a competitive edge through the benefits provided to your executives and senior professionals. Executives can use this type of insurance as a new and valuable tax-deferred accumulation vehicle which can help fund "living benefits1."
What are the benefits of Executive Group Life insurance for employers?
Executive Group Life insurance provides life insurance benefit amounts that are better aligned with the needs of executives and senior professionals and enables you, as the employer, to deliver enhanced benefits, while simultaneously helping to control overall benefit costs.
This product gives you flexibility in establishing life insurance benefit amounts and adds valuable, permanent insurance coverage to your firm's executive benefit suite, helping the organization to more effectively compete for talent in the marketplace.
What are the benefits of Executive Group Life insurance for executives?
Executive Group Life insurance helps satisfy the higher income protection needs of executives and senior professionals by providing benefit levels that are usually higher than those available through the Group Term Life insurance plans offered by many employers.
This type of coverage gives key staff an effective, additional accumulation vehicle to help fund "living benefits1," such as post-retirement healthcare, by building policy account value in a tax-deferred manner and offering withdrawals tax-free up to the policy cost basis. The portability of the product allows continuation of coverage after individuals leave your firm2, giving them the opportunity to retain their EGL insurance -- and all of the benefits associated with it -- for the long-term.
Covered individuals also receive additional flexibility to help ensure this valuable insurance evolves with their changing needs. Executive Group Life insurance participants may borrow or withdraw accumulated account values from their policy, providing them with another accessible source of funds and incur no charges for surrendering their policy after leaving an employer.1
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1 Withdrawals and decreases in Face Amount may have tax consequences. You should consult your tax advisor. Policy withdrawals are not subject to taxation up to the amount paid into your policy (your cost basis). If the policy is a Modified Endowment Contract, policy loans and/or withdrawals will be taxable to the extent of gain and are subject to a 10 percent tax penalty. Policy loans and/or withdrawals also reduce the cash surrender value and policy death benefit. Taking a policy loan could have adverse tax consequences if the policy terminates before the insured's death.
2 Costs for portable certificates may be higher than those for active employees.