Tax Advantages of Life Insurance
Life Insurance death benefits are generally tax free and the Cash Value Savings Account in life Insurance policies grow tax deferred and can be taken out tax free. However, contributions are not tax deductible.
The key to tax free distributions is that money taken out is in the form of a policy loan. As long as a policy complies with appropriate IRS codes and is not considered a Modified Endowment Contract or MEC, loans are not taxed.
Unlike many other retirement vehicles, permanent life insurance does not have certain restrictions There are no penalties for distributions before the age of 59 1/2 nor are there required minimum Distributions (RMDs) after age 72
Permanent life insurance can be a good supplement to existing retirement accounts that offer significant tax advantages.
Schedule Your Consultation if you want to learn more about how this tax advantage can be added to your portfolio.