Originally Posted by
GunshipGuy
Can someone explain this to me: I have a taxable amount of $44.03 on my paycheck for Delta provided life insurance ($500k, I believe). Now while I like the idea of getting "free" life insurance, a taxable amount of $88 a month seems pretty high. A 45 year old can lock in a $500k term policy for 20 years at about $25 a month (which would then take him out to age 65). Gotta wonder why the $88/mo value being placed on this benefit. What am I missing?
The IRS taxes "value", much like their recent efforts to tax people's frequent flyer miles for the "value" those add to their lives. The insurance adds value to our career, so they make us pay.
There are most certainly pilots on the list today who have returned from cancer, heart issues, etc., who would have a difficult, if not impossible time, finding life insurance. This company "freebie" may be the only game in town for them.
Lastly, the $88 is taxed at your marginal tax rate, so you are probably only paying $20 or so a month for it.