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New England Financial Sells Pension Plan With Policy Inside:

New England Financial, Boston, has launched a version of its top-selling variable universal life insurance product, Zenith Flexible Life 2001, for use within traditional qualified retirement plans.

In the 1980s, life insurance played a key role in small-business retirement plans, said Jack LaBombard, second vice president in charge of retirement-plan design and consulting. But interest waned in the 1990s due to tax law changes, the growing popularity of 401(k) plans and greater interest by employers and employees in mutual funds and investments. Now, life insurance sales to qualified plans are on the rise, he said.

New England Financial's new product offers a level or variable death benefit, 29 subaccounts
Subaccount
A term used in bookkeeping. For example, the insurance expense account may have various different subcategories such as building and property insurance, auto/fleet insurance, general liability, environmental, professional liability, law enforcement, and other insurance.
 and a minimum face amount of $25,000 to make it available to lower-paid workers. New England expects small businesses will be more interested in tax-qualified pension plans, with passage earlier this year of the Economic Growth and Tax Relief Reconciliation Act, which sets higher maximum contribution levels, expands tax deductions for employers and provides a tax credit to small-business owners for plan start-up costs.

Business owners and employees may find life insurance a good addition to a qualified plan because premiums are tax-deductible, said LaBombard. And the employee pays lower insurance rates than group term Table I costs, and those rates (from the PS-58 table) are recoverable as part of the cost basis
Cost Basis
1. The original value of an asset for tax purposes (usually the purchase price), adjusted for stock splits, dividends and return of capital distributions. This value is used to determine the capital gain, which is equal to the difference between the asset's cost basis and the current market value. Also known as "tax basis".

2. Difference between the cash price and the futures price of a given commodity.

Notes:
1.
, he said. At death, the pure insurance proceeds (death benefit minus cash value) are income-tax free to the beneficiary, LaBombard added, and proceeds also may be estate-tax free as a result of this year's estate-tax reform.

Without insurance, all distributions from qualified plans are taxable.
COPYRIGHT 2001 A.M. Best Company, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2001, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:New England Financial Zenith Flexible Life 2001 variable life insurance product
Comment:New Products and Services.(New England Financial Zenith Flexible Life 2001 variable life insurance product)
Publication:Best's Review
Article Type:Brief Article
Geographic Code:1USA
Date:Oct 1, 2001
Words:278
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