GEAR payments are broken into group term and a contribution to a reserve. The reserve is controlled by the insurance carrier and managed so as to support conversions of the group term to permanent policies with an issue age that reflects the date of entry into the group, instead of the attained age at conversion. This unique approach allows the GEAR concept to be used to meet the tax requirements of both Section 79 and Section 419A(f)(6). GEAR can be used as a stand-alone, owner friendly benefit, as an alternative to 412i, or as a companion plan to either a 401k or a 412i plan. GEAR death benefits can be assigned out of the estate on the date of creation and the death benefit never touches the estate again. A viable trust can exercise the conversion option and enjoy the dividend stream that accrues in the reserve account. GEAR can be used to structure a buy-sell or fund estate liquidity. The material provide here will explain GEAR and some of its uses. If you have questions, call us to discuss this great product. |
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