Parachute Value Sample Clauses
The Parachute Value clause defines the amount payable to a policyholder if a participating life insurance policy is terminated before it acquires a surrender value. In practice, this clause ensures that if the policy is discontinued early—before the policyholder is eligible for the standard surrender value—they will still receive a predetermined, often lower, payout. This mechanism provides a minimum guaranteed benefit to policyholders who exit their policies prematurely, thereby offering some financial protection and reducing the risk of total forfeiture of premiums paid.
Parachute Value. “Parachute Value” of a Payment shall mean the present value as of the date of the change of control for purposes of Section 280G of the Code of the portion of such Payment that constitutes a “parachute payment” under Section 280G(b)(2), as determined by the Accounting Firm for purposes of determining whether and to what extent the Excise Tax will apply to such Payment.