Remember the only two “sure things,” in life? One of them is lurking right around the corner; oh, yes, the tax man cometh, indeed. Before panic sets in, take a deep breath and know that by putting your money into a Whole Life Insurance policy, you can truly find a reprieve from heavy taxes. Instead of the adage, “the more I make, the more they take;” you could be saying, “the more I make, the more I take.”
There are so many advantages to using permanent life insurance. To name a few; life insurance provides market security, a steady rate of return, immediate liquidity, and of course, tax benefits.
Tax Advantages of Life Insurance
When an individual decides to open a permanent life insurance policy, the cost of the insurance centers around moderate to good health and age. However, properly structured Whole Life Policy, used to implement an individual’s overall wealth strategy, is built and centered on the Cash Value.
The cash value is what grows tax-free and when you borrow against your policy from the insurance company, it is not considered a taxable event. This means the liquid capital is accessed with as much value as what the current market will give.
Whole Life Insurance shelters your money from taxes and inflation for the duration of your life, and your family’s lives after you pass. Unlike other investment vehicles, like Roths or 401(k)s, Whole Life Insurance does not have acute mandates on when you can receive distributions, nor does it limit how much money you can contribute. Whole Life Insurance allows you the opposite – to contribute as much as you’d like and borrow at any time and for any reason. No one is limiting the use of your policy.
Tax-Free Death Benefit
Inheritance tax does not get issued when a beneficiary is bequeathed money from a life insurance policy’s death benefit. Most people want to leave their heirs with a legacy – and a legacy that will do them some good. By using Whole Life Insurance to build wealth while living, the death benefit also naturally increases. And any money left inside a cash value account, will automatically transfer to be part of the death benefit.
This strategy can keep a family’s wealth secure for generations. Heirs can receive a tax-free inheritance, or income, and safeguard the money again inside a Whole Life Policy. Then following the same behavior strategy with life insurance, can reap the living wealth-building benefits, and a large death benefit. Permanent Life Insurance has been used by the ultra-rich, for this very reason – to leave a legacy, build wealth, and preserve wealth.
More than a Death Benefit
Whole Life Insurance is much more than insurance, it covers financial loss in the event of death, and it is a vehicle for your money. Instead of facing the tax season with apprehension, you can now face it with peace, knowing that your Permanent Life Insurance helps you keep your taxes under control.
Watch: The Financial Climb