Whole life insurance is one of the last great tax loopholes. It provides a variety of tax shelters to almost everyone. I say almost because qualifying is based on personal health. Where else can you find a financial tool that allows your contributions to grow tax-free with the ability for your distributions to come out tax-free? Add to this tax-free dividends and a death benefit that will pass to your beneficiaries free of income tax. There’s nothing else like it. A Roth IRA allows your contributions to grow tax-free with tax-free distributions but it does not provide tax-free dividends nor does it pass tax-free to beneficiaries upon death. Add to that a litany of regulations surrounding the liquidity, use and control of a Roth IRA and it’s easy to see why a whole life insurance policy makes more sense for my clients.
It’s even possible for some to make tax-free contributions into a whole life insurance policy! Taken together these tax benefits can amount to an enormous savings in personal wealth and thus makes whole life insurance one of the top tools of estate planners. Instead of giving more tax dollars to the government, whole life insurance allows you to keep that hard earned money in your pocket.
Scott Storace
Tags: tax benefits, tax-free, whole life
Great post Scott! Whole life insurance is definitely the way to go.