Tax-advantages built into cash-value life insurance
Cash-value life insurance have several tax advantages that can mimic Roth IRAs, except without income or contribution “limits” imposed on a Roth IRA (such as income phase-out, earned income requirement, and annual contribution limits).
Selecting the correct type of permanent cash-value policy must be done with care; there is not one type of insurance that is better than another type, each option has a unique value proposition for each unique situation. Also, the individual terms of each issuing insurance company of any given type of insurance policy, may play a part in your decision to use one type of insurance over another. Said another way, the same type of insurance still differs from one carrier to another!
Complexities of cash-value life insurance should be explained by an experienced, licensed professional
Using permanent cash-value insurance for this purpose should be secondary, the primary purpose of the policy is to provide life insurance and it offers a panoply of benefits above and beyond tax benefits to the cash-value.
A full understanding of:
- cash-value crediting
- loan interest
- direct or non-direct recognition
- general account surpluses/obligations
- carrier ratings
- performance history
along with several other items, need to be explained by a qualified agent, and understood for all products being considered by the policy purchaser. That being the case, it is most prudent to speak to an experienced, knowledgeable professional.