The ING Life Companies have introduced a new life insurance product, Self-Owned Life and Retirement — or S.O.L.A.R. — Insurance Arrangements.
The product provides life insurance for key employees and is funded through employer contributions, after-tax employee contributions or a combination of both. The benefit is employee-owned, which can reduce risk for the employer, and can be used to supplement the employee’s retirement income in the future.
The insurance arrangements are backed by ING’s new Indexed Universal Life-Global Plus policy. Policyholders have death benefit protection and can choose between a fixed or indexed strategy. The indexed strategy credits interest based on a formula that uses a portion of the two better-performing of three indexes, the S&P 500, the EuroSTOXX 50 and the Hang Seng, looking back over a five-year period.
The policy also offers a select loan option, which allows the policyholder to take a loan — at a fixed interest rate of 6% per year — from the policy and use it to pay the income taxes owed on the compensation paid by the employer. The loan amount remains in the fixed or indexed strategy, so the cost of borrowing for taxes could eventually be partially or totally offset by the amount of interest credited to the account.
“Some traditional nonqualified plans simply aren’t getting the job done in today’s environment,” says Kurt Fasen, senior vice president and head of Insurance Sales Support at ING. “Employers want to get rid of the complexity associated with these plans and employees want more control over their retirement benefits. S.O.L.A.R. Insurance Arrangements are simpler for the employer, and it puts the insurance policy in the hands of the employee.”
For more information, www.ing.com/us.