MMC Benefits Handbook
The GVUL plan has a feature that allows you to contribute additional amounts, above the cost of insurance. By adding extra premium for investment to your GVUL coverage, you can take advantage of the following investment features and tax advantages. You should always consult with appropriate tax, financial planning and legal advisors for personal advice.
Investment Features & Tax Advantages:
- A variety of variable investment portfolios1
- An interest-bearing account option
- No surrender charges at withdrawal2
- An income tax-free death benefit to your beneficiary(ies) should you die while the coverage is in force (as is generally the tax treatment of all life insurance)
- Tax-deferred accumulation of potential investment earnings
- Tax-free transfers between investment portfolios (up to 12 per year) at no additional cost (some restrictions may apply to withdrawals and transfers from the interest-bearing account)
- No tax penalties for withdrawals prior to age 59-1/23
- Tax-free withdrawals up to basis2
- Tax free access to investment gain in excess of cost basis through loans.2,3
1 Money allocated to the variable investment portfolios is subject to market risk, and when redeemed may be worth more or less than your original investment. Please review the GVUL prospectuses for important information regarding the variable investment portfolios, including charges and expenses.
2 In general, if the funding of a certificate exceeds certain limits, it will become a "Modified Endowment Contract" (MEC), and become subject to "earnings first" taxation on withdrawals and loans. An additional 10% penalty for withdrawals and loans taken before age 591/2 will also generally apply. MetLife will notify participants if a contribution would cause the certificate to become a MEC. Withdrawals and loans reduce the death benefit and cash value and thereby diminish the ability of the cash value to serve as a source of funding for cost of insurance charges, which increase as you age. Withdrawals are subject to a partial withdrawal charge equal to the lesser of $25 or 2% of the amount withdrawn.
3 Provided coverage is not lapsed or terminated. If coverage is lapsed or terminated loans become taxable as withdrawals.