Income Tax Benefits of Life Insurance
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The PositiveLights.org Web Site |
Cash value (permanent) life insurance policies are an often forgotten source of potential funds for the elderly when they need to pay for an assisted living facility or nursing home.
Loans secured by the cash value of a life insurance policy that required at least seven equal annual premiums are not subject to income tax by the policy owner.
Life insurance proceeds received by a policy beneficiary are not usually subject to income tax beneficiary unless the beneficiary had paid for the right to receive the policy proceeds. (See transfer for value)
Another way to secure cash from a life insurance policy even when it is does not have any cash value is to sell it to a "viatical settlement" company. These companies pay you to make them the beneficiary on your life insurance policy. If the policy isn't paid up or is a term insurance policy, they will make the future premium payments but those payments will reduce the benefit you will be able to receive.
Copyright, 2003, Vernon K. Jacobs
Vernon Jacobs is the Editor/Publisher of The International Wealth Protection Reports, which are a collection of research reports on legal methods of asset protection and tax avoidance. Further information on this subject is available at http://www.offshorepress.com/ Jacobs is a CPA who has worked as a free lance tax and financial author/editor since 1977. Details about his credentials and experience are online at http://www.offshorepress.com/vkjcpa/
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