New answer on: What Is An Economic Life Insurance Policy?

By: Peggy Mace

Peggy Mace — Sun, 26 May 2013 20:08:16 +0000

Economic Life Insurance is another name for Economatic Life Insurance, or Enhanced Whole Life. This is one of the categories of Whole Life. Economic Whole Life policies combine term and participating life insurance. If dividends are paid, it is applied to paid up insurance, which in turn reduces the Term coverage. The total coverage remains the same; the paid up additions gradually replace the Term coverage with Permanent coverage.

By: David Racich

David Racich — Sat, 25 May 2013 22:57:36 +0000

Unless this is a proprietary product name for a life insurance company, the question may be asking about the economic benefit of a life insurance policy. The life insurance economic benefit used in split dollar designs or life insurance policies held in qualified plans have two components; the cash value and the death benefit. The death benefit can be deemed as additional compensation that has an economic benefit that will be taxed at ordinary income tax rates.