Originally Posted by
Verdell
It's not a bad thing to seek the devil's advocate on the new policy. i.e. "What's the catch?"
It's seeming to me that the catch is a potentially better apples to apples policy, with the addition of potentially poor, but optional, additional investment products. Insurance is in the money-making business afterall, and it's rare that they would offer 2 very similar options, dangle a carrot in front of the second one (less imputed income), without some angle to it. I think the angle is that they expect to make more money on the additional investment side for those who choose to participate. Might be a small % on a small % of total participants, but insurance plays the % game.
Fair enough. If there is truly some massive “gotcha” boogie man that wasn’t disclosed by ALPA or Delta, I’d gladly join the group DFR lawsuit.
I could be wrong on this, but I don’t think the imputed income differences have anything to do with discretion by met life in the desperate treatment of both plan offerings. I think it’s a byproduct of the tax code and how group term vs universal life policies are treated for purposes of calculating imputed income.
Everything else being equal, smart money is on the most tax efficient option.