The CMFG Life Insurance Company uses the TruStage brand in order to sell insurance through the CUNA Mutual Group. It sells to both credit union members and the general public. You might be wondering what the CMFG acronym stands for, but it doesn’t stand for anything.

The CMFG Life Insurance Company has been in operation for more than eight decades. It has an A rating from A.M. Best Agency, which is a financial rating company. This is the third highest one, out of 16 different categories from A.M. Best Agency. What this means is that the CMFG life insurance company is stable financially.

Information About the Company

The CMFG Life Insurance Company is also known as the CUNA Mutual Credit Union National Association. The company has been serving different credit unions since 1935, and it is easy and quick to get a policy with CMFG.

The company is a leader when it comes to serving members of the credit union. The company started the TruStage brand in 2012. This insurance program was designed to better market the policies.

The rates might be a bit more than what you can find in other places. However, the fact that the company offers such easy and fast coverage can make up for this fact. Plus, you do not have to have a medical exam, and your family can depend on this insurer.

It is a good idea to get a quote from this company and from the others that you are considering so that you can get the best possible policy for you and your loved ones.

What You Can Get

You can get a policy issued from the age of 25 to 69. You can get a policy in an amount from $10,000 to $100,000. From the ages of 51 to 69, you might get a policy from $10,000 to $50,000.

You will answer just a couple of questions about your health information. You will most likely not need to have a medical exam to get this coverage. It only takes about 10 minutes or less to get this policy online.

Your approval for a policy is often based on your answers to the questions that are on the application. Plus, TruStage will pull in information from other sources to see if you are a good fit.

The policy you get will last until the age of 80. You can keep renewing your policy until this age. While it might be a bit more expensive than other policies, it is still fairly affordable. If you die during the term, it will pay you a benefit.

Term Life Insurance Instant Issue Policy

One product that the CMFG Life Insurance promotes through TruStage is its instant issue term policy. The company does offer other financial products and life insurance, but many times, its marketing is centered around this kind of instant product.

Technology continues to change, which means that getting instant life insurance is becoming even more popular. With developments in artificial technology (AI), it is easier than ever before to underwrite policies and manage risk.

The changes have resulted in more affordable options in today’s insurance market. As this change becomes embraced more, you will likely see more companies offering this kind of policy as part of their solutions.

The Benefits of CMFG Life Insurance

CMFG Life Insurance and TruStage are mutual insurance companies. When you are looking around for life insurance policies, mutual companies might offer more benefits for you as a customer. It is the policyholders, not the shareholders, that own mutual companies.

What this means for you as the customer is that the administration is often more focused on customers. Policyholders often have more say when it comes to managing the company.

Another advantage of working with CMFG Life Insurance is that it offers instant policies. Technology is constantly changing, and today’s insurance companies are using the advancements to reduce both underwriting time and risk.

This means that the simplified issue and instant issue policies are both becoming more common. This product lets the company make a fast decision about whether or not you are approved. It can also expedite the purchasing stage.

This is becoming more popular with people who do not want to wait a long time to get insurance. Plus, it reduces the hassle of a medical exam or a long underwriting time.

There is also a 30-day guarantee of your satisfaction. If you are not satisfied with the policy, then you can cancel it in the first 30 days after getting it and get a full refund.

Working With Credit Unions

Today’s customers are often not as favorable toward large banks as they were in the past. This means that the market has now seen an increase in the demand for credit unions. This is because they are often nonprofit companies that can support the local community.

As more people are turning away from the bigger banks, credit unions are growing, creating a market where mutual life insurance companies can do very well.

Cons of the Company

There are a few things to be aware of that might be considered cons by some people. For example, you can’t buy a policy that is larger than $100,000.

Some people also believe that the insurance policies from the TruStage brand are expensive when compared to other policies from leading companies. This is why it is so important to do your research and shop around to compare your options. The policy might cost as much as 38 percent more when you compare them to other products.

With each age bracket of five years, the premiums of CMFG term life insurance policies will increase. This is mentioned in the fine print, which is important to read with any insurance policy. With some other kinds of policies, the price will likely stay the same when you have the policy.

However, the adjustment to the premium based on your age is fairly common, and it is something that you might get stuck with if you do not read the fine print carefully.

Two-year exclusion

It might be hard to find this information on the company’s website, but there is a two-year coverage exclusion on the guaranteed issue for death. But what you might not realize is that this does not cover what is considered an accidental death.

This is known as graded benefits, and you can often find them in guaranteed issue whole policies. During the two years, if you die naturally, your premiums and the interest on them will be refunded instead of getting a death benefit. If you want to get a guaranteed issue policy, this is very important to notice.

Hard to Compare Prices

You will use the TruStage portal, and this is a direct sales portal for the life insurance company. It is harder to compare prices with similar products from other life insurance companies.

You will likely want to go with an independent insurance agency when you are looking for insurance. That way, you can ensure that you are getting the best options and are doing your research when it comes to finding the quality and price.

Common Questions About CMFG Life Insurance

You might be wondering if deaths related to COVID-19 are included in this policy. The insurance will cover death by any cause that is not excluded explicitly in your policy.

The policy does not come right out and say that COVID-19 is excluded, so if someone passed away because of this, the claim would not be denied.

You may also wonder if it is easy for you to be approved. You can get your quote, fill out your application, and be approved in just a few minutes for a policy with TruStage.

Remember that you will most likely need to give your social security number when you are applying. The company will use your social security number to verify that you are who you say you are. The company might also need to run a credit check on you and find out other data while it is doing underwriting.

The company is legitimate, and you can read its over 3,600 reviews on the reviewing site Trustpilot. The company has a four-star rating there and has many satisfied customers. The staff members are knowledgeable and offer great customer service both before and after you make your purchase.

There are a few complaints, but most of the reviews of the company are fairly positive.

Closing Thoughts

The CMFG Life Insurance Company offers coverage that can be paid to your beneficiaries. It is an average price, and you can get it through the TruStage brand. If you are thinking about buying life insurance, it is worthwhile to explore all of your options.

Like many other life insurance policies available today, there are termination provisions, limitations, requirements, and exclusions that keep the policy in force. You have to do your research. Once you have purchased a policy, you need to review it carefully. Contact your issuing company if you have questions about it.

When shopping around for life insurance, you might have come across Family Heritage Life and Health Insurance Company, also known as the Globe Life Family Heritage Division. The company has been in business for more than three decades. But you might be wondering if the company is legitimate. Keep reading to learn the answer to this and other questions.

About the Family Heritage Company

The company was created in 1989 in Ohio, and then it started to expand around the country. It was in business for 20 years before it had offered 200,000 policies.

In 2012, it became a part of the Torchmark Corporation. It was a wholly owned subsidiary.

The company creates many kinds of life insurance policies. Plus, it also offers specialty types of health insurance. The goal of its health insurance policies is to offer extra coverage for certain illnesses and accidents, such as stroke, heart attack, and cancer care.

The company still has its headquarters in Ohio, but it also has some offices in McKinley, Texas. The company is licensed in 49 out of the 50 states, and it sells its products through local agents.

Products Offered by the Company

The products that the Family Heritage Life Insurance company offers are fairly straightforward. You can get life insurance for both children and adults. The plan is a whole life insurance policy that includes simplified issue.

That means that you do not have to get a medical exam. The benefit amounts for simplified issue insurance policies are often somewhat lower.

You can also get accident insurance so you can pay for medical or other costs if you have an accident. That includes hospital costs, physical therapy, or ambulance fees.

Plus, if you get a cancer policy, you can get coverage for costs related to the diagnosis, such as the treatment. These might not be covered by your regular insurance policy.

You can also get a heart attack or a stroke policy that offers similar coverage. The goal is to help with bills besides just medical costs.

With an intensive care policy, you can cover the cost of being in an intensive care unit, as well as air ambulance costs. These can all help you if you have a sudden injury or illness.

You may decide to go with the Hospital Indemnity insurance, which can cover out-of-pocket costs under standard insurance.

What Are the Rates?

You can’t get online quoting for the policies offered by Family Heritage Life Insurance. However, the company’s rates are fairly competitive since its name is not as recognized as many other companies are. Its policies are also very specific.

If you do want a quote from Family Heritage, you can get one by contacting one of the company’s agents or the company itself.

The Benefits of Choosing the Company

You might decide to get insurance from this company since it has high ratings for its financial strength from the company A.M. Best. If you are getting insurance from Family Heritage, you can have peace of mind knowing that the company is able to pay any claims.

Getting Coverage for Your Entire Family

You can get a couple of different insurance plans from the company. One of them might be for your kids and another one might be for the adults in the family. One of the reasons that Family Heritage stands out from the other competitors is that it offers insurance for kids.

Many times, life insurance companies do not offer coverage for those who are under the age of 18.

You can get permanent life insurance plans from the company. Each policy will get a cash value, and the coverage can last for a long time. The money you get in the cash value of your policy can be used while you are living, and it is an asset.

You can also use it to supplement your income when you are retired. If you need coverage for your family, you can explore the many policies offered by the company.

Easy Underwriting Process

When it comes to purchasing life insurance for you or your loved ones, you will need to go through an underwriting process. This is used to determine the risk of insuring someone and the rate that they will offer the policy at.

With underwriting, the insurer will consider the personal information of the individual getting the policy. That might include their health history, or lifestyle, among other factors. You might need to undergo a medical exam for a fully underwritten policy.

However, the Family Heritage company does not require you to have a medical exam during the underwriting process. You can expect to still fill out a questionnaire about your health history.

It is important to tell the truth on this because if you do not and it is found that you have certain health conditions, the policy may be declared invalid. With the simplified process, it is easy for you to apply to the policies.

Quick Issuing of Policies

With the simplified underwiring process, it is faster to get a policy from Family Heritage. It can take more time to issue a fully underwritten policy since the process is more thorough. It might also require you to schedule and have a medical exam. One of the advantages of choosing this company is that it is able to get you your policy so quickly.

More Insurance Products

You can get a policy for other kinds of issues as well. For example, you might get one for intensive care, cancer, accidents, or heart attacks. You can also get a policy for hospital indemnity.

No matter which additional policy you might choose, the goal is to get coverage for certain situations or conditions. For example, having cancer might result in extra expenses, such as health care services related to the treatment.

If you want to have one company for several different kinds of insurance, then Family Heritage is the one for you to choose.

The Claims Process

There is a variety of information about claims offered for each product, and these can differ depending on the product that you have. On the claims page, there is a menu for each of the options. The site says that the company only accepts claims by fax or mail.

The goal behind this is to keep each claim confidential for the customer. The company does not offer online filing. However, you can download the form to make a claim easily.

If your policy is less than two years old, you might need to enter some extra information and they may need to review it more. You can call the phone line to ask for help or to get more questions, but you can’t file a claim in this manner.

Are There Any Cons?

The company does have a few disadvantages as well. These include:

Hard to Estimate Your Payments Online

If you want to know more about the coverage and the premium rates, you might have to meet with one of the representatives from the company. Doing so in person or via a phone call will allow you to get more specific information on each of the policies.

You may be able to use third-party providers, estimates from other companies, or online quotes to estimate the cost, but you will not know the full cost until you have submitted the application and completed the underwriting process. Then you will know the final cost for you.

Hard to get Online Information

There is some good general information about the company on the website for Family Heritage, and you can learn about the policies and benefits offered, but you will have to talk to the company to get more information on the coverage levels, premium rates, benefits, and any terms conditions.

That isn’t to say that you should not consider the company when you are getting permanent life insurance policies for either you or your family members. It is good that you can get policies for anyone in the family. If you are interested, then you should contact the company to get more specific information on how much the policies cost and their terms.

Customer Reviews and Ratings

This insurance company has an A+ rating at the Better Business Bureau. There have been a couple of complaints against the company, but most of them have been closed.

Many complaints are because people canceled their policies, and the cancelations weren’t properly processed.

On the Complaints Board, you can find both negative and positive comments. Some people believe that the salespeople are pushy about trying to cover the policy. Other people misunderstood what the plan covered.

You should always read the fine print. If you do not understand something that is in the plan, it is important to ask the agent about it.

Closing Thoughts

Family Heritage Life is a smaller company that offers both basic simplified and supplemental health insurance. It might do a bit of door-to-door marketing, and that might make some people less likely to choose this company. There isn’t anything discouraging about this company.

It can be hard to think about life insurance. It is a complicated subject, and you have many options. Plus, you might feel uncomfortable when it comes to planning for the end of your life.

Although many people believe that life insurance has value for them, they might not be certain what the best kind for them is. Whole life is a good option for many people, but there are still a lot of options to choose from. Keep reading to find out more about your options.

About Whole Life Insurance

Getting whole life insurance means that you will have a permanent form of insurance. This will stay in force as long as you keep paying your premiums. When you apply for it at first, you agree that you will be bound by a contract where the company will pay the beneficiary a death benefit once you die.

You can choose how much you want to be covered for, and the amount you pay each month will be calculated depending on your health, age, and gender. But as long as you keep paying the premiums, the insurance will be valid. The premiums will not change based on your age or health.

Unlike term insurance, a whole policy will not expire. Instead, it will still be valid until you cancel it or pass away.

The premiums that you pay toward the policy can generate a cash value. You can use this for certain conditions.

You can withdraw the cash value as a loan, or you can use it to cover the premiums of the insurance. You need to repay any loans before passing away. Otherwise, that amount will be taken out of the death benefit.

What the Policy Covers

This kind of policy can cover the owner’s entire life. If you have this kind of policy, then your beneficiaries can get a cash payment once you pass away.

The premiums and costs are more expensive than term life because the insurer insures you for your whole life, not just a certain amount of time. Once you get older, it can cost more money to insure you since you are more likely to die.

About the Cash Value

If you were wondering if whole life has a cash value, the answer is yes. This is one of the few kinds of insurance policies you can get that has a cash value to it. This is generated when you pay your premiums. If you pay more premiums, then you will get more cash value to it.

The advantage of having a cash value is that you can withdraw it as a policy loan. For example, perhaps you have been paying the premiums for a long time and suddenly have an unexpected expense.

As long as you pay off the interest and loan, you will still get the full coverage of the policy paid to the beneficiary. However, if you do not pay the loan off, then the death benefit will go down by the amount of your loan.

Using It as an Investment

Think of whole life policies as being a type of investment for you. This is because of the cash value of it.

However, you should not think of just any kind of life insurance as a type of investment. A true investment is regulated heavily and has safeguards that will protect the investor. Life insurance does have some regulations, but those do not have much to do with finances.

Instead, think of this kind of insurance as being a safeguard that will protect your family from financial difficulties if you were to pass away. With the death benefit, they will not need to use up their investments or savings to support themselves.

Accessing Cash From the Policy

The longer you have the policy for, the more cash value it will have. Then you have more options for getting a cash payment. The value of this policy lets you get money through a loan, surrender, or withdrawal. Or you can use this value to pay future premiums on the policy.

Surrender

If the policy has been around for a couple of years and has cash value, you might choose to cancel your policy. Then you can get a cash payment for the surrender value.

By doing this, you give up the coverage and will get the value minus any applicable fees. When you cancel the policy like this, your beneficiaries will not get anything from the policy after your death.

This might give you money that is needed, but it should be one of the last resorts unless you have enough life insurance in other places.

Withdrawing

You can often take a certain amount of money out of the policy. Often, the withdrawals up to the basis of the policy can’t be taxed. The policy basis is the amount of money that you have paid to the policy.

Any withdrawals that are greater than this will be taxed at the applicable income tax rate. The amount you take out will reduce the death benefit a bit.

Loan

With a cash-value policy, you can often borrow against the amount. However, you will not borrow against the policy itself.

You will instead borrow money from the policy issuer, using the policy as your collateral. Depending on your policy’s terms, your loan might have interest on it. Unless you pay your interest yourself, then it will be applied toward the balance of the loan.

If you do not pay the full amount of the loan back, then that amount will be deducted from the death benefit. Plus, there is a maximum amount in loans you can get from the policy.

Closing Thoughts

You may decide that whole life insurance is right for you if you want to be able to access the money for another source. If you do cash out the policy, you will want to avoid not having coverage. Do your research on other options for you.

You may have read about decreasing term life insurance but not know what it is. This type of insurance is a kind of renewable term life insurance that has coverage that decreases as the life of the policy goes on. This decreases at a predetermined rate. What this means is that the death benefit decreases.

About Decreasing Term Insurance

The premiums often remain consistent during the contact. The coverage reductions often happen either annually or monthly, depending on the kind of policy you have. The terms might be anywhere from a year to 30 years. That depends on the plan that the company offers.

About the Death Benefit

You might be wondering what the death benefit is. The basic calculation to figure out how much the insurance costs is the death benefit plus the length of coverage.

You will make a couple of choices when getting a policy. First, you will determine how long you want the policy to last for. Then you will determine the amount of money that you need to go to your beneficiaries or your family once you die.

The answer to how long you want it to last for is the term length. You might choose to get insurance for a time period that ends after a certain amount of time has passed. That is term insurance. Or you might get whole life insurance, which will last for your entire life.

The answer to how much money you want your family to get will be the amount of coverage to get. That is the death benefit. For example, you might get a death benefit from a few thousand dollars to millions of dollars.

Usually, the longer your policy is good for, the more it will cost you. That is true when you are getting policy coverage amounts as well. For example, if you get an insurance policy that has a death benefit of a million dollars, it will cost more than if the death benefit is only $750,000.

Saving Money by Decreasing the Death Benefit

If you get decreasing term life insurance, the death benefit will decrease gradually over the life span of the policy.

What this means for you is that either annually or monthly, the amount of money your family will get upon your death will decrease the longer you live.

You might be wondering why you wouldn’t want to give your family as much money. The answer lies in the ability to save money. It is a good idea to know how these policies work and why they might be a good option for some people.

How It Works

Often, people will get a decreasing term life insurance policy that only lasts for the amount of time that they need to cover certain debts. That might include student loans, a mortgage on a home, or car loans.

The amount of debt will decrease over time since you will pay it off. That means that the death benefit of the policy no longer needs to be as high, so that can also decrease. The idea is that you do not need to be over-insured. That means that you are paying more for insurance than you really need.

Getting a decreasing term policy might not be as expensive as a traditional type of term life insurance. That is why more people want to get them.

Understanding the Policy

The idea behind these policies is that as you get older, certain responsibilities and the need for more insurance will go down. Many kinds of decreasing term policies are mortgage life insurance. The benefit of them might be put toward the rest of the mortgage on someone’s house.

The payment structure you have is the main reason this kind of insurance differs from having regular term life insurance. The amount that you get in the death benefit will go down, and this is unique from other kinds of insurance.

By itself, getting a decreasing term insurance policy might not work enough for your individual insurance needs. That is particularly true if you have a family and your dependents need your money. Getting an affordable regular term insurance policy might give you the security that your death benefit can offer during the contract’s life.

Instead, consider this policy for protecting your personal assets. It is also not as expensive as other kinds of insurance are.

Getting Inexpensive Insurance Coverage

Compared to universal life or whole life insurance, decreasing term policies are not as expensive. The death benefit can mirror your repayment schedule for personal debt, such as mortgages. The policies are good for debt that your income or personal assets might not be able to cover. That might include business loans or personal loans.

This type of insurance gives you a death benefit that does not accumulate cash, unlike whole life insurance policies. That means that this option only charges you modest premiums to get comparable benefit amounts.

An Example of How the Policy Might Work

Consider a man who is 30 years old and does not smoke or have other unhealthy habits. He might pay around $25 every month for the premium for a policy that has $200,000 in coverage and lasts for 15 years. That might be customized to go with the repayment of a mortgage.

The monthly cost of the premium for this plan will not change significantly. However, as the man gets older, the risk to the insurance company goes up. As the risk increases, the death benefit can decrease.

By getting a permanent policy that has a face amount of $200,000 might cost you $100 or more every month. With some whole life or universal life insurance policies, the face amount can be reduced if the policyholder uses it for advances or loans. However, they still usually have fixed death benefits.

When Would You Use Decreasing Term Life?

There are a few times when using this kind of insurance might make the most sense for you. For example, perhaps you know that your grown kids are financially independent of you.

And perhaps your spouse already has retirement benefits and income. In this case, the insurance would not be needed to replace your income or to round out money from retirement.

Another time you might want to get this kind of insurance is if you are getting life insurance in order to get a business loan. It can help you secure the loan. You should know for certain that the loan will be paid off before the policy is finished.

Or you might get life insurance to cover a period of time when you are paying off the mortgage. Again, you will want to know for certain that you can pay off the mortgage in the time limit of the policy.

No matter which of these cases might apply to you, you will know that you do not need to have extra money in the time frame that you are getting the policy in. If this is so, then you will want to compare the monthly cost for a policy with a level term insurance policy. Make sure that the premium you are paying for the decreasing policy is really less expensive than your other options.

Comparing Your Options

You might choose to use a life insurance quote tool to do this. They let you get quotes from many life insurance companies, so you can compare your options and decide on the best type of policy for you.

It is important to compare your options because you might be able to spend less for a certain type of policy that better suits your needs. There is no need to pay more to get less of a benefit depending on the policy you get.

What Are the Benefits of Choosing a Decreasing Term Policy?

One of the top reasons that people choose these policies is to protect their personal assets. Small companies might choose to use these policies if they want to prevent themselves from going into debt against operational expenses and startup costs.

With small businesses, if one of the partners passes away, it can be helpful to have the proceeds from the death benefit. The money from the decreasing term policy can be used to fund the operations and help them to continue.

Or it might be used to pay off a percentage of debt that the deceased individual is responsible for. This offers a bit more security, which allows the business to take on loans to continue their operations if one of the owners dies. That way, the company will not go out of business.

Closing Thoughts About Decreasing Term Insurance

It can be a good idea to look into this type of insurance if you have loans that you need to pay off. This insurance offers a bit more security for you and for your helping to pay off any debts if you pass away. It’s worth doing your research to see if this option is right for you.

If you are an employee and you have more than $50,000 in your group life insurance policy through your workplace, then you might have to pay taxes on any amount that is more than $50,000. This is the rule under the federal law.

About Insurance

If you do have this much in insurance or more, then your employer might have to impute the income to you as the employee. To cover this requirement, some employers might impute the income on the insurance coverage as they give it to you over the year.

But other employers might wait until the year is over to do this. It is recommended that the employers track the value of the insurance throughout the year. However, either method is allowed under the law as long as the employer does this required imputing by the time the year is over.

What Is Life Insurance?

This policy is a contract with an insurance company. Either you or your employer will make regular payments, which are known as the premiums. You will then get a death benefit once the insured person dies.

Often, the policy is chosen based on the goals and the needs of the policyholder. For example, you might have term life insurance through your employer. What this does is provide protection for a certain amount of time.

On the other hand, a permanent insurance policy, like universal or whole life, offers coverage for the rest of your life. Remember that the death benefits that you will receive are often free of taxes.

Usually, getting a policy ensures that you get financial support for your family or dependents. But you can also have other beneficiaries on the policy. Some people might want to look into life insurance.

For example, if you have minor children, then there might be a loss of income. Or the child may no longer benefit from the parent’s caregiving skills. That might create financial difficulties. By getting life insurance, you can ensure that your children will have enough financial resources until they are able to become financially independent.

If you have special-needs children that are adults, you may also want to consider getting this kind of insurance. They may need care for the rest of their lives, even after you pass away. With the death benefit from their insurance, you can ensure that you are able to fund them and have someone manage a trust for them.

If you own property with another adult, you might also want to consider this kind of insurance. Whether or not you are married to the other property owner, if one of the adults were to pass away, then the other might not be able to afford the taxes, loan payments, or maintenance on that property.

Life insurance might be a good idea in this case. For example, that might include a couple that decided to get a mortgage to get their first home together.

Sometimes, elderly parents might want to give money to their grown children that offer them care. In many cases, the adult children might sacrifice by offering their valuable time to take care of their elderly parents.

That might include taking the parents to appointments. Or they may give their parents financial support. With life insurance, it is possible to reimburse the adult child once both of the parents have passed away.

Why This Matters

It is important to recognize your imputed income because this is considered to be a fringe benefit. This refers to a benefit, like an experience, service, or good, that your employer offers to you along with your regular salary.

When it comes to group life insurance, the IRS says that getting life insurance of more than $50,000 is considered to be a fringe benefit. That means that it is a taxable form of income for you.

For employers, it is important to note imputed income life insurance because that has to go in the W-2 tax forms for each of the employees. Employers need to report this because if they do not, then they might accidentally undervalue how much in taxes each employee has to pay.

Some Background on Imputed Income

According to the federal tax code, the first $50,000 in your group life insurance coverage is excluded when your employer offers it to you. So, if you have a policy that is less than this amount, you likely do not have much to worry about.

However, there is no exclusion in the tax code for extra insurance that your employer provides to you. What this means is that anything greater than $50,000 is subject to federal income taxes. Plus, it is subject to Medicare and Social Security taxes.

The amount of excess coverage that your employer offers to you needs to be reported on your W-2. They need to withhold your portion of the Medicare and Social Security taxes. Plus, the employer needs to pay their portion of these two types of taxes.

Remember, that in some cases, you might be able to avoid this imputing requirement if the rates you pay in premiums for the group term insurance meet some requirements. You can talk to your employer about whether or not your specific insurance policies meet these requirements.

Provided by the Employee and Paid for by the Employer

If you pay the entire premium for your life insurance, you might automatically assume that you do not get the coverage provided by your employer. However, when it comes to group term coverage, that might not be the case in all instances.

If your employee pays for your coverage using dollars that have not been taxed, then for tax purposes, your coverage might be treated like the employer has paid for the premiums. Plus, even if you pay your premium with dollars that have already been taxed, your coverage might be considered to be provided by your employer.

This might happen if the cost of your coverage is more than the premium that the insurance company is charging.

How the IRS Determines the Price of Getting Group Term Insurance

The IRS’s regulations have a list of rates that you can use to calculate the cost of the extra insurance coverage you are getting and how much you will need to pay in taxes. According to these Table I rates, they are not changed when inflation takes place.

This means that they will not change throughout the year. They will only change when the IRS decides to change the regulations. Just remember that you will need to check their website to get the most updated information.

You should also remember that the rates that the IRS determines might be lower or higher than the premiums that you actually pay to get your group term insurance. If the rates from the IRS are higher, then you might have extra taxable income.

This might happen even if you paid all of the premiums for your extra coverage with your after-tax dollars. This is because of the extra coverage you have, which is determined by the IRS.

Determining How Much Income to Impute

If your employer pays all of your premiums for your group life insurance, then it is easy for you to determine how much you should impute. Just take away $50,000 from your total life insurance coverage that you have for that year.

Then multiply the rest of that amount by the right rate found in Table I. If your employer does not pay the premiums, but your payments are done before taxes, then the same thing will apply.

If you pay part or all of this premium for any type of life insurance, such as the first $50,000 of it, with after-tax dollars, you will need to do some more math. Once you have found the right Table I cost for the coverage that is more than $50,000, you will subtract the amount of your after-tax contributions toward your coverage.

That includes any contributions that are for coverage of less than $50,000. If you get a positive number, then this is the amount you should impute.

If you have more than one term life insurance plan that is covering you, then according to the IRS, you need to aggregate the coverage so that you can’t exclude the amount of $50,000 or more in your coverage for that year.

About Dependent Life Insurance

You might have dependent insurance that is provided by your employer. This is taxable unless the insurance you have is no more than $2,000. If you have more than $2,000 in your coverage, then all of that insurance is taxable. That includes the first $2,000 of that.

Closing Thoughts

If you have a lot of coverage from your employer, then you should plan on imputed income. Talk to your employer if you are not certain about whether or not you need to pay income taxes on your insurance. Knowing more about this can help you to make more informed decisions.