New Private Placement, Trust-Owned Life Insurance Premium Tax Bill Signed into Law
May 20, 2016
Publication| Tax| Banking| Trusts & Estates
On May 5, 2016, Delaware Governor Jack Markell signed into law House Bill 237, substantially lowering the premium tax rate for trust-owned, private placement life insurance contracts covering the life of an individual. The new law lowers the premium tax rate to 2% for the first $100,000 in net premiums and 0.0% on net premiums in excess of $100,000. With the enactment of this legislation, Delaware now has the lowest premium tax rate on privately placed, trust-owned life insurance in the United States. This change in premium tax rates coupled with Delaware’s favorable trust laws, including laws specifically relating to insurance trusts, make Delaware a very attractive jurisdiction to consider for privately placed, trust-owned life insurance.