Taxes On Life Insurance

Taxes On Life Insurance

There are usually not taxes on life insurance, however there are always exceptions to the rule. For example, if the estate in question is more than $2 million there may be estate taxes. In order to protect beneficiaries from unwanted tax costs the policy holder should arrange for their policy to be transferred to their beneficiaries using a trust fund. Because there are strict IRS rules regarding this type of transaction a Certified Financial Planner should be used to do this. Also, the further ahead of time you arrange this action the better.

For those whose estates do not exceed $2 million, their life insurance is probably not going to be subject to taxation. For this reason, you can use life insurance to accumulate tax-free funds. However you must choose the right kind of insurance policy. Whole life policies are tax free, and sometimes result in dividends. Universal life policies are also tax free and all the money that exceeds your premium is invested, with the returns being applied to the premium or placed in a holding account and built up over time. Your financial planning expert can advise you on these types of investment strategies.
Variable universal life insurance can be an even better investment vehicle than universal life insurance because there are more investment options. You can choose where your money goes, unlike with whole or universal where the insurance company makes the investment decisions. Also, there are a wider range of investment vehicles such as stocks in which you can choose. You should be aware that if the policy holder withdraws cash from their policy, the amount of their premium is not taxed while anything above it would be. For example if you have paid $2000 in premiums and you withdraw a total of $3000 from your insurance investment account only $1000 would be taxable. Your tax bracket also factors in when it comes to taxes on life insurance investment funds.
Because of the possible taxes on life insurance investment money, a wise strategy is to grow your insurance policy account over a long term period by adding money on a regular basis and allowing it to accumulate. Then when you do decide to withdraw cash don't take a large lump sum at once but rather smaller sums to avoid unnecessary taxation. Of course before doing anything it is very important to work closely with a Certified Financial Planner experienced in handling life insurance investments and tax issues.

Life Insurance News:

First Person: Why My Kids Have Life Insurance *Note: This was written by a Yahoo! contributor. Do you have a personal finance story that you'd like to share? Sign up with the Yahoo! Contributor Network to start publishing your own finance articles. ...

First Person: Why I Don't Have Life Insurance *Note: This was written by a Yahoo! contributor. Do you have a personal finance story that you'd like to share? Sign up with the Yahoo! Contributor Network to start publishing your own finance articles. ...

AM Best Upgrades Continental Life Insurance Company and Its Subsidiary - MarketWatch (press release) AM Best Upgrades Continental Life Insurance Company and Its Subsidiary MarketWatch (press release) The principal methodology used in determining these ratings is Best's Credit Rating Methodology -- Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of AM Best's rating process and highlights the different rating . and more » ..

Liberty Life Selects iPipeline to Automate Marketing, Selling and Processing . - MarketWatch (press release) Liberty Life Selects iPipeline to Automate Marketing, Selling and Processing . MarketWatch (press release) Headquartered in Greenville, SC, Liberty Life Insurance Co. provides retirement income solutions that help Americans prepare for the future. For over a century, Liberty Life has earned the trust of its policyholders through financial stability, . and more » ..

Many life insurance aspects taken for granted - USInsurance Online.com Many life insurance aspects taken for granted USInsurance Online.com A recent report from life insurance company Colonial Life noted some aspects of life insurance policies that consumers do not take advantage of as much as they probably should. Wavier of premium allows consumers who become sick or disabled to have . Allianz Life Announces Appointment of Carsten Quitter as New Chief Investment .MarketWatch (press release) Allianz Life hires chief investment officerInsurance Business Review Allianz names new chief investment officerMinneapolis / St. Paul Business Journal all 8 news articles » ..

San Francisco Bay Area Insurance Agency of MassMutual Financial Group Opens New Palo Alto Office to Continue Focus on . WALNUT CREEK, CA-- - The San Francisco Bay Area Insurance Agency LLC, a Massachusetts Mutual Life Insurance Company General Agency, is opening a new Palo Alto office to continue and expand its focus on ...

First Person: What to Know About Borrowing Against a Whole Life Insurance Policy *Note: This was written by a Yahoo! contributor. Do you have a personal finance story that you'd like to share? Sign up with the Yahoo! Contributor Network to start publishing your own finance articles. ...

First Person: Why We Have Term Life Insurance *Note: This was written by a Yahoo! contributor. Do you have a personal finance story that you'd like to share? Sign up with the Yahoo! Contributor Network to start publishing your own finance articles. ...

10 Commonly Overlooked Features of Life Insurance Policies - MarketWatch (press release) 10 Commonly Overlooked Features of Life Insurance Policies MarketWatch (press release) 17, 2011 /PRNewswire via COMTEX/ -- Purchasing life insurance is one of the most important financial decisions consumers make. Yet they often know very little about the features of their plans, so they fail to take advantage of them. . and more » ..

Matrix Direct Wins Workplace Excellence Grand Prize San Diego-based term life insurance agency takes home top award from local chapter of the Society for Human Resource Management (PRWeb November 18, 2011) Read the full story at http://www.prweb.com/releases/2011/11/prweb8975524.htm..

Pan-American Life Insurance Group Names New Board Member - Sacramento Bee Pan-American Life Insurance Group Names New Board Member Sacramento Bee By Pan-American Life Insurance Group NEW ORLEANS, Nov. 16, 2011 -- /PRNewswire/ -- Pan-American Life Insurance Group (PALIG), a leading provider of life and health insurance in Latin America and the United States, announced today that Dr. Patrick J. . Pan-American Life Insurance Group Names New Board MemberPR Newswire (press release) all 7 news articles » ..

Over 1,000 People are Talking About Online Insurance Marketplace on the Facebook Platform Over 1,000 People are Talking About Online Insurance Marketplace (http://www.OnlineInsuranceMarketPlace.com) on the Facebook PlatformLos Angeles, CA (PRWEB) November 18, 2011 Online Insurance Marketplace, the premiere site to get term life insurance quotes instant, announced today that the company has over 1,000 people talking about them on their page on the Facebook Platform. To be exact, 1 ...

VA Life Insurance Program Rated Highest in Customer Satisfaction - MarketWatch (press release) VA Life Insurance Program Rated Highest in Customer Satisfaction MarketWatch (press release) WASHINGTON, Nov 16, 2011 (BUSINESS WIRE) -- The Department of Veterans Affairs' Life Insurance Program has once again validated, through a renowned independent survey, that Veterans and their beneficiaries are very highly satisfied with the service . and more » ..

Douglas A. Wheeler Joins New York Life as Vice President in Governmental Affairs - MarketWatch (press release) LifeHealthPro Douglas A. Wheeler Joins New York Life as Vice President in Governmental Affairs MarketWatch (press release) NEW YORK, Nov 18, 2011 (BUSINESS WIRE) -- New York Life Insurance Company, America's largest mutual life insurer, announced today that Douglas A. Wheeler has joined the company as a vice president in its Office of Governmental Affairs. . NY Life Boasts New State Affairs LiaisonLifeHealthPro all 9 news articles » ..

Nippon Life Insurance cuts its stake in Olympus - Taipei Times Moneycontrol.com Nippon Life Insurance cuts its stake in Olympus Taipei Times One of Olympus Corp's top shareholders, Nippon Life Insurance, cut its stake in the scandal-hit Japanese firm, but yesterday signaled it would remain as an investor in the company, citing its strong core business and technology. . Nippon Life: will support Olympus from "current position"Reuters Japan insurer reduces scandal-ridden Olmpus stakeBusinessWeek Nikkei Edges Higher in Volatile Trading; Olympus in Focus123Jump.com Wall Street Journal -Bloomberg all 157 news articles » ..

Life insurance options after a breast cancer diagnosis (ARA) - More women are surviving breast cancer and living healthy and fulfilled lives thanks to early detection, advanced medical treatments and new options that may not have been available before...

SOUTHERN PIONEER LIFE INSURANCE CO. v. THOMAS - Leagle.com Paragould Daily Press SOUTHERN PIONEER LIFE INSURANCE CO. v. THOMAS Leagle.com Appellant Southern Pioneer Life Insurance Co. ("Southern Pioneer") appeals the Greene County Circuit Court's denial of its motion to compel arbitration. An order denying a motion to compel arbitration is an immediately appealable order. . Court affirms judge's decision in Thomas caseParagould Daily Press all 2 news articles » ..

First Person: Life Insurance and Disability for Small Business Owners *Note: This was written by a Yahoo! contributor. Do you have a small business story that you'd like to share? Sign up with the Yahoo! Contributor Network to start publishing your own finance articles. ...

Douglas A. Wheeler Joins New York Life as Vice President in Governmental Affairs NEW YORK--(BUSINESS WIRE)--New York Life Insurance Company, Americas largest mutual life insurer, announced today that Douglas A. Wheeler has joined the company as a vice president in its Office of Governmental Affairs. He reports to Senior Vice President in charge of the Office of Governmental Affairs, George Nichols III. Mr. Wheeler is responsible for overseeing all state government relations ...

Smokeout: How much life insurance your cigarette money could buy - Fox Business Smokeout: How much life insurance your cigarette money could buy Fox Business 17, then consider the high price of cigarettes and how quitting smoking can affect your life insurance quotes. A smoker in New York, the state with the highest average retail price for a pack of cigarettes at $9.11 when all of the taxes are added, . and more » ..