No matter what names are given to a variety of Life Insurance policies, by numerous substantial Life Insurance Companies-THERE ARE ONLY TWO FUNDAMENTAL TYPES OF POLICIES; TERM and PERMANENT;
Both term and permanent have a place in financial planning, and both serve to protect and add value for two very distinct reasons;
Term; Protection only, the simplicity of coverage, low initial cost.
Permanent; Tax-advantaged, numerous living benefits, tax-deferred cash build-up, and tax-free retirement when properly funded.
- Low initial cost
- Cost goes up over time
- No cash or equity build-up
- Coverage ends at some point because the cost becomes prohibitive
- Higher cost at inception
- Cost can remain level
- Has equity living benefits
- Coverage can last to age 120-when properly funded
The Retirement Question: Taxable or Tax-Free?
For most people, the two most compelling reason that cause a roadblock to a safe and secure retirement is volatility (of the stock market) and taxation (unknown higher limits).
There are primarily four ways to accumulate money; one has more advantages than others, depending on where you are in your journey of accumulation, distribution or wealth transfer.
Primary Accumulation alternatives:
- Free Money – Gifts/401(k) match
- Tax-Free Money / loans-life Insurance
- Tax-Deferred Money / During Accumulation
- Taxable Money / Distribution of all qualified plans.
To Defer or Not to Defer my taxes is a question that CPA’s, Financial Advisors, Life Insurance Agents, Economists will continue to debate for time infinitum because the financial winds of volatility and uncertainty blow in ways to continue the mystique for all of the time.
Tax-Deferral will partner you up with the IRS, to share with them at
a later date, at an unknown tax rate, or you may pay now when taxes are at the lowest in years, and most likely will never be this low again, and then you can look forward to a TAX-FREE Retirement forever.
There are, however, educated choices you can make that will allow a large degree of predictability and certainty and tranquility.
“Life Insurance-is the biggest benefit in the tax code because the money comes out Tax-Free and there is no limit to this tax break. Life Insurance is the best way to leverage money. And too, the single best way to leverage the tax code to
build real wealth, real money that is Free and Clear of Taxes. Tax-Free Money!! Wow!”