Notice and consent requirements are the specific legal conditions that must be satisfied before an employer can treat death benefits from employer-owned life insurance policies as income-tax-free under Internal Revenue Code Section 101(j). These requirements mandate that, prior to policy issue, the employer provide the employee with written notice stating the intent to insure, the maximum face amount, the employer's status as beneficiary, and the possibility that coverage may continue after employment ends. The employee must give written consent to being insured and acknowledge that coverage may be retained post-employment. Employers must also meet annual reporting obligations on Form 8925. Failure to meet notice and consent requirements can cause a portion or all of the death benefit to be taxable, undermining the financial objectives of key-person or nonqualified plan funding strategies. From a broader planning perspective, this feature interacts with product guarantees, regulatory rules, and carrier administration. Advisors rely on it when explaining long-term policy performance, stress-testing scenarios, and avoiding unpleasant surprises for clients. When policies are reviewed years after issue, a clear understanding of how this concept works in the contract helps teams decide whether to keep, modify, or replace existing coverage in a way that supports the client's goals and respects tax and compliance boundaries.

In day-to-day practice, advisors refer to notice and consent requirements when designing employer-owned life insurance programs and key-person coverage. Carrier new business checklists typically flag Section 101(j) cases and require signed notice and consent forms before issuing policies. Advisors help business owners understand that satisfying these requirements is not optional paperwork but a critical tax-compliance step. During policy reviews, especially ahead of corporate transactions or IRS examinations, companies verify that notice and consent requirements were met for all covered employees and that records are properly retained. When gaps are discovered, tax counsel may be consulted to evaluate exposure and potential mitigation strategies, including future process changes to prevent recurring issues. In everyday practice, producers, BGAs, and home-office teams return to this concept when files become complex or when clients request changes that affect cash value, risk, or compliance. Training sessions, field manuals, and webinars often highlight it as a recurring theme so that advisors develop consistent language when speaking with clients, CPAs, and attorneys. This shared understanding reduces errors, speeds up case handling, and builds trust because everyone involved can clearly explain what is happening and why.