Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 05-08-2007, 07:31 PM
Junior Member
 
Join Date: Mar 2007
Posts: 6
What are the main tax advantages of a whole life Insurance policy?

An insurance agent approached me and tried to sell me a whole life policy stating that there are several features that may have positive tax advantages!

Can you please provide me with an overview as to what the real facts are, ie tax advantages of a whole life from your point of view, and if you have any issues in general that are negative in terms of buying a whole life policy. In fact, and advice from your point of view is appreciated!

Tks a lot!!! Your site was tremendously helpful to me during my tax preparation!



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #2 (permalink)  
Old 05-08-2007, 10:49 PM
Junior Member
 
Join Date: Jan 2007
Posts: 11
I bought Whole life/Permanent policy because I was told that it was a great way to save a bit of money, and obtain permanent life insurance. I choose Whole life over term because term though it is cheaper, runs out after 10 or 15 yrs!

I bought when I was 30 years and maximum term policy I could buy at the time was for 30 year out! What would happen if you lived longer than 60 years, who is going to give you insurance at Age 60 with preferred rating with all potential health problems at that age!

Think about insurability at Age 60!



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #3 (permalink)  
Old 05-15-2007, 08:58 AM
Junior Member
 
Join Date: Jan 2007
Posts: 6
I bought term insurance I thought at the time, I did not need to be covered at Age 70. I mean who needs life insurance at Age 70? I have paid off my debts at that time, have no liability, no mortgage and kids have completed college at that time.

The point here is that the difference in premium between whole life and term is invested directly into mututal funds by me. I have had the discipline to do that for 10 years.

I think Whole life is very expensive and the Insurance Co's make a killing along with the pushy Insurance agents.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #4 (permalink)  
Old 05-15-2007, 03:58 PM
Member
 
Join Date: Jan 2007
Posts: 40
I think you are both right to some extent. I would like to hear TaxGuru's point of view, though. I am sure he has some good points to add to this discussion thread.

As far as I am concerned, I know that if you are in business, there are situations that if you apply for a large loan, or finance an aquistion, that the Note holder would be requesting a Life Insurance collateral. This is usually Term Insurance.

So, in this case, taking a low cost term insurance is the right answer.

I initially bought Term insurance as a means of mortgage protection. . This in my opinion is the single most important reason for purchasing the Term Insurance.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #5 (permalink)  
Old 05-15-2007, 10:48 PM
Junior Member
 
Join Date: Feb 2007
Posts: 6
I bought whole life insurance for permanent life protection. The issue was do I know when I am going to die? Of course not, so I needed life insurance, and I wanted to be permanently protected, so I naturally went for whole life.

I know a lot of people who got caught with the A L Williams method of approach, ie buy Term Insurance and invest the difference in Mutual Funds etc. But, most people do not have the discipline to follow through with maintaining consistent investment plans.

So, in my case, I bought whole life about 10 years ago, and invested the funds in aggressive portfolio, the result is a very nice build up of cash value in my life insurance policy!

The Cash value is also very important as it can be used to fund the policy as well.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #6 (permalink)  
Old 05-16-2007, 09:10 AM
Junior Member
 
Join Date: Jan 2007
Posts: 19
I think Life Insurance is a must for everybody especially if you are in business. I recently filed out an application for a business loan, and one of the questions asked was what was cash value of the Life Insurance policy.

This is considered an Asset! Wow! So, banks like it I guess, it increases your net worth. So, business folks, I think it is a great asset as well.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #7 (permalink)  
Old 07-08-2007, 11:39 PM
Junior Member
 
Join Date: Jan 2007
Posts: 13
Is Life Insurance benefit taxable? Will it increase the estate of the deceased?

Is Life insurance death benefit taxable?

Do the beneficiaries have to pay federal income tax?

What if the deceased estate exceeds the $2m exemption amount?

Thanks for your response.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning