[WI Conservative 4 Bush]

I work for a company that sets up plans like this. In ALL cases that we work on, there is either a $ benefit that goes to the insured (employee), or, in the case where the firm wants all of the insurance benefit, we have the insured sign a consent letter. We've done this business for quite a while, and have always had this 'consent letter' policy in place, even when some state laws said that such consent is not necessary.

It's always been our opinion that it is better to be safe in this area.

I can try to answer any other questions Freepers may have about these arrangements. I will say this. Most of the companies we work with use this insurance to help their bottom line AND provide some insurance to the executives being insured. For those companies that don't 'split' the insurance with the executive, they are doing this to realize the tax-free gain on the build-up of the insurance policy and the tax-free treatment of the future death benefit. This has a dual purpose from the standpoint of the company. They 'protect' themselves in the event of loss of a key employee, and they have diversified their investment portfolio. Some people may not like the fact that some types of insurance may now be used in a similar way as investments, but really, insurance products have moved in that direction for over 40 years now.

Lastly, I will say this. Our firm does not engage in the practice of having companies insure all employees, regardless of position. Our guideline is usually officers and above. Companies that don't adhere to this, while they may be legal in today's environment, may be setting themselves up for problems in the future. Because, the only constant in the legislative arena is change.

[John O]

In ALL cases that we work on, there is either a $ benefit that goes to the insured (employee), or, in the case where the firm wants all of the insurance benefit, we have the insured sign a consent letter

looks like you are doing it right. Makes it legal, moral and ethical.

GSA(P)