Life Insurance Imputed Income Reminder

Life Insurance Imputed Income Reminder This Alert pertains to employers who sponsor basic life insurance coverage exceeding $50,000 As the end of the year is quickly approaching, we wanted to remind you of the tax issue surrounding group term life insurance in excess of $50,000. Please see the attachment. We understand that most payroll vendors impute each paycheck rather than at year- end. This reminder is for plan sponsors that impute the value annually at year end. Beneficiary Changes: Also attached is a generic beneficiary form for the group life insurance program. It is a good practice to periodically remind your employees to update their beneficiary selection. Since this form does not need to be returned to the insurance carrier and is for the company files only, employees can change their beneficiary selections at any time during the year and as frequently as they wish. Often times, new forms are attached to prior forms, for historical purposes. If you want to review your life insurance benefit amount to determine its adequacy relative to industry benchmarks, please contact your EBS Consultant to schedule a review. We can also discuss implementing supplemental and dependent life insurance solutions. Special Note Regarding Certain LTD Plans: Please remember that while this Alert pertains to Life Insurance amounts exceeding $50,000, employers who offer employer provided LTD insurance with a tax-free benefit feature (A.K.A. LTD Gross up), must impute the value of the LTD premium. Please contact your EBS Consultant if you have questions about imputed income for life or LTD insurance. Resources Group term life insurance commonly asked questions Generic beneficiary designation form