use life insurance as tax free income

Tax Free Retirement Income

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
  • dividends
  • 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.