If you want to save money on your home and Life Insurance Policy needs, a bi-weekly benefit plan is a way to go. Universal Life Insurance features a cash value that can increase over time, provided you pay sufficient premiums. Over time, you may use the cash value to cover unexpected medical bills or even pay down your mortgage late. Paying off the mortgage with the cash value of your life insurance can save you thousands of dollars in high-interest payments.
Unlike the traditional universal life insurance policy, a bi-weekly policy allows you to take advantage of two policy provisions simultaneously. Unlike a conventional universal life insurance policy, you will only be taxed once for the difference between the cash values of the two coverage plans. This makes the bi-weekly plan more desirable in some instances. For example, it may be more tax-effective to take advantage of the two policy provisions at the same time if one has an affordable lifestyle than to take advantage of two different policies if the two coverage plans do not fit into your lifestyle. Also, the bi-weekly allows you to build cash values faster than the traditional policies since the cash values are applied to the loan every month, providing you with instant tax savings.
As a general rule, there are two types of life insurance policies. There are “non-qualified” coverage plans and “qualified” coverage plans. Non-qualified plans are those that only provide coverage for those who are not yet eligible for Medicare. These individuals are usually younger than 65 and not yet in a group that offers Medicare benefits. On the other hand, qualified plans are those that offer coverage for those who are already eligible for Medicare but who choose to supplement the coverage by purchasing optional policies like disability income protection or additional coverage for accidental death or dismemberment.
There are several ways to determine if an applicant is eligible for non-qualified or qualified life insurance coverage. The most common way to do so is to ask the applicant to prove that he or she is an employee of an organization that offers coverage within the first 30 days of employment or within the first year of service. The applicant must also provide proof that he or she is a United States citizen or a legal resident of the United States. The applicant cannot use another individual’s work history, salary or educational background as a way to prove eligibility because those individuals are not considered to be employees of the covered entity. However, some companies allow former employees to remain eligible under these circumstances by offering them limited liability companies or life insurance plans.
If the applicant does not provide proof of citizenship or income within the first 30 days of employment, the company must use other methods of verification, such as pay stubs, documents proving age (depending on the state), or enrolling the applicant in a health savings account. These methods of verification can help companies establish whether or not an applicant is eligible for non-qualified life insurance without evidence of insurability. If the company is unable to verify an applicant’s age within the first 30 days of employment or any other time for that matter, the life insurance policy will become “qualified” based on the information that is available to the company under its policies and procedures. If a company determines that an applicant is eligible for unsuitable life insurance based on the information that is available to the company under its policies and procedures, then the policy will become “non-qualified” after the policy term expires or the premium for the policy is paid in full.
To determine whether or not an applicant is eligible for non-qualified or insurable life insurance, the company will have to use other methods to determine eligibility. For example, if the applicant was employed for one year or more and did not receive any death benefits from an employer, he or she can apply for “qualified” or “non-qualified” life insurance. In order to be deemed “qualified” for these types of policies, the applicant must not be employed for the same period of time that he or she was covered by a group health plan. In order to find out if an applicant is eligible for these types of plans, the company will have to obtain verification, which can usually be done online. If you are covered by an HMO, PPO or other such managed care plan within your first 30 days of employment without evidence of insurability, your coverage will become “qualified” after 90 days or until the end of the policy term, whichever is applicable.
Another type of non-qualified or insurable coverage that an employee can be eligible for is an individual coverage or indemnity plan. Unlike most indemnity plans where the company pays the entire premium each month, an individual coverage policy pays the entire premium for a set monthly amount. Once the individual coverage premium has been paid, the insurance company will then take the remaining amount – known as the residual premium – from the check that is left for paying benefits. This amount is subject to the age of the applicant at the time of application and is limited to the amount that the individual coverage policy pays for. The younger that you are when you begin receiving coverage, the less amount that you will receive in a residual premium each month.
Policy holders who do not have an employer-sponsored group health plan or an individual coverage policy can also qualify for a premium tax deduction. Premiums that are deducted from a paycheck are considered taxable income and are subject to the tax code. Premiums that are paid on an individual basis are considered untaxed income and are exempt from the tax code. Anyone can claim a premium tax deduction – even self-employed individuals. It is important to understand that insurance premium deductions are only available to taxpayers who have an adjusted gross income and do not itemize their deductions.