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FINANCE COMMITTEE TO RECONSIDER TAX ON LIFE INSURANCE PROCEEDS ON FORMER EMPLOYEES; EFFECTIVE DATE CHANGED

October 02, 2003

Tax Analysts reports today that the Senate Finance Committee is reconsidering its proposal to tax life insurance proceeds received by corporations on their former employees.

The committee also delayed the effective date of the proposal, in whatever form it is approved. It had been slated to take effect for policies sold after September 17; now policies sold before the bill is signed by the President will also be grandfathered.

The article quotes Senator Charles Grassley, Finance Committee Chairman, as saying the committee will have a hearing on the proposal the week of October 13. Tha article says

"(Grassley) said that lobbyists who oppose the committee's COLI provision visited 'every office in the Capitol' during the past week, but that even the industry recognizes some change is needed because it 'put forth some legislation.'"

If you are considering such insurance, you now have a window to make your decision before the new rules apply.

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