The Internal Revenue Service has opened its arms to life insurers’ use of any new official, standard mortality tables that extend past age 100.
IRS Revenue Procedure 2018-20 could make designing and pricing life insurance policies a little easier for insurers that want to let purchasers keep coverage in place past age 100.
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The Internal Revenue Code limits taxpayers’ use of life insurance tax breaks by putting restrictions on the types of mortality tables used to create the coverage. Before 2001, U.S. life insurance mortality tables ended at age 100. When the insureds turned 100, their life insurance coverage usually ended.
In 2001, the National Association of Insurance Commissioners (NAIC) adopted new mortality tables, the 2001 Commissioners’ Standard Ordinary (CSO) Mortality Tables, that ended at age 121.
The IRS endorsed use of the 2001 CSO Mortality Tables in IRS Revenue Procedure 2010-28.
Last year, the NAIC followed up with a new set of tables, the 2017 CSO Mortality Tables, that extend to age 121.