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Rate Tables

For detailed information about the valuation of insurance benefit (formerly known as "Value of Economic Benefit" or "VEB") under split-dollar arrangements, see Notice 2002-8, Notice 2002-59, Revenue Ruling 2003-105, and Treas. Reg. §1.61-22(d)(5). For arrangements involving Northwestern Mutual life insurance policies, the guidance provided by these pronouncements is summarized below:

Plans started after January 28, 2002

  • Table 2001 (government-provided table), or
  • Northwestern Mutual’s rate table, which varies depending upon the applicable date for measuring the value of insurance benefit:
    • From January 2016 and beyond, use the 2016 Low Table
    • For previous years, see rate tables below

Plans started on or before January 28, 2002

  • Table 2001 (government-provided table), or
  • Northwestern Mutual’s 2000 Low Table

When To Measure the Value of Insurance Benefit:

Example: Employer owns Northwestern Mutual permanent life insurance policy on key employee’s life with death benefit of $1,000,000. An endorsement split dollar agreement allows employee to name a beneficiary for $400,000 of death benefit. Assuming the employee is a 45 year-old female, the Value of Insurance Benefit is calculated as follows using both the IRS and Northwestern Mutual 2016 low table:

  • The value of insurance benefit is $612 using IRS Table 2001 ($400,000 X $1.53 / 1,000).
  • The value of insurance benefit is $274 using Northwestern Mutual’s 2016 Low Table (100,000 X $1.09 / 1,000 + $300,000 X $0.55 / $1,000).

Links to Rate Tables:

This publication is not intended as legal or tax advice. This information was compiled by The Northwestern Mutual Life Insurance Company. It is intended solely for the information and education and/or promotional purposes of Northwestern Mutual financial representatives and advisors with whom they work. It must not be used as a basis for legal or tax advice, and is not intended to be used and cannot be used to avoid any penalties that may be imposed on a taxpayer. Financial representatives do not give legal or tax advice. Taxpayers should seek advice based on their particular circumstances from an independent tax advisor. Tax and other planning developments after the original date of publication may affect these discussions.

© 2016 The Northwestern Mutual Life Insurance Company, Milwaukee, WI