Group Carve-Out Plan

What Does Group Carve-Out Plan Mean?
A type of group term life insurance designed to appeal to well-paid executives by improving their employer-sponsored life insurance coverage. Under a group carve-out plan, the employee retains $50,000 of ordinary group term life insurance coverage, but the rest is provided by a universal life insurance policy. The group carve-out plan replaces the current group life insurance amount over $50,000 on the people the company wishes to carve out. 

Investopedia explains Group Carve-Out Plan
Disadvantages of ordinary group term life insurance include its non-discrimination requirement, loss or reduction when the employee retires or leaves the company (or high expense to continue it), and imputed income costs for coverage over $50,000. The universal life policy improves the overall life insurance package in that it is portable and can create supplemental retirement income through its cash value. It is also not subject to non-discrimination rules, allowing employers to offer it only to the employees they care most about retaining, such as top executives.