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Sub Headline: The Tax Benefits of Life Insurance Work for the Living as Well as the Dead
Synopsis: The vast majority of life insurance proceeds at the death of the policy insured will bypass probate and pass tax-free to the beneficiary. A TAMRA compliant life insurance policy can generate tax-free income from collateralized policy loans. Watch the interview with best selling author, popular platform speaker and nationally recognized retirement expert, Tom Hegna.
Content: Can a society take on the additional hardship of surviving dependents? Life insurance is one of the great redemptive solutions to our economic health as a nation and that’s precisely why the government has granted tax advantages to life insurance. It’s simply in the best interest of country.
With individual freedom comes individual responsibility. Being a good steward of your family’s finances depends upon having the proper insurance policies in place in case the unexpected occurs. Life insurance for the breadwinner and business owner protects all their dependents and business partners. It insulates against financial loss. The economic leverage can be substantial and for most scenarios, life insurance proceeds are tax-free.
But cash value life insurance has additional tax-free features like tax-free income via collateralized policy loans as long as the policy is kept in force for the life of the policy insured. The cash value life insurance policy must be issued as a non-modified endowment contract. Tax-free distributions of loans, under these conditions, are not characterized as a form of income and are not includable in the provisional income test for Social Security benefits. There is a menu of crediting options to choose from, based on your risk tolerance. Generally speaking, cash values in a life insurance policy are non-qualified monies and are not subject to ERISA regulations. That can be a significant benefit when it comes time to retire and distribute policy loans in a strategic manner to manage taxes from one year to the next.
Cash value life insurance is a powerful funding vehicle that can get you to where you want to go in retirement.
