Thomas L. Deleot CLU ChFC

CONNECT

Address:

1018 Brookstown Ave
Winston Salem, NC 27101

Phone:

336-723-0014 ,Cell: 336-403-7904

Fax/Other:

336-724-3881

 

                   Group Term Replacement  

 

The basic purpose of life insurance is to replace income should an employee meet an untimely death. Thus, life insurance is typically offered as an employee benefit. For life insurance to be a valuable benefit for high paid  executives and professionals, the death benefit must be significant and correspond to the high-income executive/professional's needs.

Although inexpensive, basic group life plans are generally characterized by a few shortcomings: 

1) Lower benefit amounts, often reduced automatically at older ages. 

2) Regular evaluation and possible resetting of the insurance rates based on claims experience.

4) Non-Assignable

5) High reportable income    

 

While these may not be of significant consequence to the average employee, benefits offered to executives, and professionals must be comprehensive and sophisticated in order to be meaningful. For this reason, many employers choose to offer permanent life insurance benefits for executives, and professionals to attract and retain the best talent.

                                                                                                                  Solution

  • Executives and Professionals own their policy. It is guaranteed issue, portable  and can be retained till death.
  • Higher Coverage Amounts - Providing economically meaningful death benefit protection for peak earners and their beneficiaries.
  • Predictable & Stable Rates - Mortality rates are set at issue based on the overall claims experience of the insurance carrier's entire insured pool, and are not subject to change based on the ongoing claims experience of the specific employer.
  • Flexible Funding Options - The employer may pay minimum premiums or may choose to have a plan that allows for additional premiums from either the employer or the physicians,executives, and attorneys to pre-fund post-employment coverage and build tax deferred cash value that could create a tax-free stream of income in retirement. This is important because Medicare premiums and Medicare tax on unearned income are based on adjusted gross income whereas withdrawals/loans from a life insurance contract are not included in adjusted gross income.
  • Confidence in the Insurance Carrier - Policies are provided through Pacific Life, a quality insurer with proven experience and attention to the special needs of upscale insureds.
  • True Portability - No application, conversion, or election deadlines to continue coverage after retirement or departure from the employer. 
  • No Forced Reduction in Benefits - No automatic reduction in death benefit occurs..
  • Portfolio Diversification - Permanent life insurance is a highly flexible, long term asset that offers an added degree of financial portfolio diversification as well as providing important tax and liquidity advantages.
  • Competitive Pricing – Can be competitive with group term
  • Tax Savings - Implementing a Group Term Replacement program would  have significant tax savings for the highly compensated  versus IRS imputed taxable income.  
  • Higher Benefits - While group term insurance plans provide benefits generally limited to a multiple of income, the Physicians, Executive, and Attorney's Group Term Replacement program can provide guaranteed issue coverage up to $4 million. 
  • International employees can be covered 
  • Policy is assignable
  • Administration - 90% of the administration is done by the Downey Group.The Downey Group has over 50 years of experience administering these plans with offices in Champaign and Chicago, Illinois.