by jlpawlik » Sat Apr 17, 2010 04:06 pm
I need to know the benefits of having either the Colonial Pretax plan or the National Teachers Associates Life Insurance Plan and the premiums are taxed? Is it worth it to get a cancer policy?
Posted: Sun Apr 18, 2010 02:14 am Post Subject:
and the premiums are taxed
Do you mean you pay the premiums with after-tax money? Or your group insurance coverage exceeds $50,000 and you are receiving "imputed income" on your W2, and that causes you to pay tax on the value of the premium paid by your employer?
In order for your beneficiary to receive a death benefit income tax-free, any premium you pay must be paid with after-tax dollars.
If your employer pays 100% of the cost of group life insurance, any amount of death benefit over $50,000 would be taxable to your beneficiary if you were not receiving "imputed income" for the value of the premium dollars paid for the excess benefit. So paying tax on that money is a good thing for your beneficiary.
I don't know anything about the Colonial Pretax Plan or the National Teachers Associates Life Insurance Plan, so I cannot comment either way.
Is it worth it to get a cancer policy?
It may be . . . if you get cancer . . . and if the policy pays a benefit.
If you get a policy with a return of premium provision (usually requires that you keep the policy for ten or more years), and don't get cancer in that time period, then you would get your money back.
It is worth it to buy a lottery ticket? Ask someone who won a bundle, and then ask someone who has never even won a $2 payout. Lottery tickets don't come with a return of premium provision.
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