Life Insurance

Many people don’t realize that some life insurance policies can offer tax free income features. Life insurance policies are basically one of two types, term or permanent. From there, other subcategories exist but those are the two main types.

Term life insurance policies focus on protection for a period of time ranging anywhere from 5 to 30 years. Term insurance is less expensive than permanent insurance. This can mean buying more term insurance for the same amount of money as permanent. Renting versus owning is a very easy way to understand the cash accumulation side of life insurance. Term insurance does not build any cash value, so it is like renting. Thinking about the advantages of owning versus renting, and vice versa, this analogy makes the topic of life insurance much easier to understand. So, should you rent or own?

The permanent, or whole, life insurance policies are a bit different. Permanent insurance policies like the Index Universal Life (IUL) policy, in combination with the rulings of the 7702 tax code, is where the opportunities are worth a second look. To understand why the IUL is such an appealing product, it is important to understand the *7702 tax code. *The 7702 tax code states that life insurance benefits are tax exempt. The excess deposits into IULs actually earn interest based on an index. “Overfunding” these types of insurance policies is quite an attractive option for many clients.

At Fitzwilliams Financial, a key financial strategy for tax-free income is to leverage the 7702 tax code. Time is on your side but only if you act now! To protect your family and assets through and past your retirement, contact Fitzwilliams Financial today.

The Index Universal Life Insurance (IUL) Policy

There are ways to avoid a large chunk of your life savings going to taxes. Today, the trend is to focus on ways to minimize your tax liabilities. The 7702 tax code states that life insurance benefits are tax exempt. There are two basic types of life insurance, term and permanent. Term insurance, commonly offered by employers, provides coverage for a certain term, or time period. On the other hand, permanent insurance like the Index Universal Life (IUL) policy offers life coverage with some sort of permanent funding.

The IUL policy can be a powerful and effective option for a tax-free income option. An IUL guarantees no loss on your principal due to the market. At the same time, you can benefit from market gains. Investing in a IUL life insurance policy allows for upside potential with none of the downside risk.

With all these different options and features, how does one know what products are best? Exactly what are the most efficient economic based solutions today for a tax free income in retirement? Contact Fitzwilliams Financial for a customized financial solution today.