Why Cash Value Life Insurance

Jun 26, 2012 Life Insurance 101, Types of Life Insurance, Wealth Transfer

Cash value life insurance can:

• Turn a specified number of premium payments into a large death benefit to protect your loved ones in the event that you die prematurely.
• Can be a smart way to accumulate wealth through its cash value.  You could use this cash value for college, unexpected expenses or as an additional source of retirement income without tax implications.
• Move wealth that has been created over a lifetime with an income tax-free death benefit.  If properly owned and structured, a life insurance death benefit can be received free of estate taxes.

The benefits of a cash value life insurance policy include:

• Income tax free death benefit paid to beneficiary
• Potential for accumulation of wealth through tax-deferred growth of policy cash values
• No funding limits based on income
• Potential for income tax-free withdrawals and policy loans
• No 10% penalty tax on cash value distributions prior to age 59 1/2

Taxes can potentially have a major impact on the amount of your savings you ultimately get to use.  Taxes can also impact the amount of any remaining assets that are received by your beneficiaries.  In the last thirty years, U.S. income taxes have been relatively low.  The top Marginal Tax Rate for the highest income earners is currently 35%, but the average top rate over the last hundred years has been almost 60%.

Even though the future of income taxes is not known, it would be fair to assume they will continue to fluctuate over time, having high and low periods.  With cash value life insurance, you can protect your family and as an additional benefit, you can help reduce exposure to adverse tax impact by shifting your savings to an asset with tax advantages.  This move has the potential to improve your financial goals.

Cash value life insurance could be the right decision to help you achieve many of your financial goals.  Take a second look at cash value life insurance as an asset for your portfolio.  It’s a smart way to accumulate, protect and transfer wealth. 

For more information or for a life insurance quote, you can reach us at 1-888-950-TERM.

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