Hi, I'm Michael Fliegelman. I created this Website, WhyWholeLife.com to answer this question, and many more you may have. You may, or may not already know a lot about life insurance. Perhaps you read an article somewhere, attended a seminar, or got a call from someone.
Michael is now on the Governing Board of the Business Owner Resource Group
Could you tell me the different between whole life and permanent life insurance? they both tax free at the end when you need to withdraw money out when the time comes? for tax wise. Which one has a better advantage?
As i do not want to see my retirement money goes down the drain?
Or pay to uncle sam depends on my tax bracket at that time?how do we escape from paying Uncle sam part of our retirement saving?
Which one has higher risk? Permanent or whole. could you explain it to me so I can made a better decision for my retirement money?
thks
tiffany
Whole Life is a specific form of Life Insurance. While Permanent Life Insurance is not a product but describes products that can include policies such as Whole Life, but also may include other policies such as Universal Life, Variable Life, Surivivorship Life, as well as others. All permanent forms of Life Insurance have similar or identical tax rules. They grow tax deferred, The death Benefit is income tax free. And withdrawals made up to the policies cost basis are received income tax free. Loans can be taken on the policies that will allow funds in excess of the cost basis to be withdrawn tax free. However caution about how much to borrow and keeping the policy in effect need to be taken into consideration when borrowing. Each policy and fact pattern needs to be understood before action is taken so to avoid any negative results.
As for your tax question the Life Insurance can be a very good savings plan, the cash value grows without taxation. The death benefit can be received tax free by the beneficiary. Income can be taken out of the policy without taxation as long as caution and certain guidelines are utilized, such as not withdrawing to much money, thereby risking the policies viability to stay in effect throughout the insured owners lifetime. The danger is if you end up surrendering the policy, that you made a profit on. If you did so, the gain would be taxed at ordinary income tax levels. This is the same regardless of which form of Permanent Life Insurance you choose.
If I can be of addittional help. Call me. I would be happy to try to help you. Also there is some articles on the site that I would suggest you to read regarding your questions.
As November is Long-Term Care Awareness Month, I wrote an article "Life Insurance & Long Term Care: Have You Figured out the Puzzle Yet?" that was published on ProducersESource.com You might want to take a look, because if/when you need long-term care, if not planned for, your savings & your retirement can be put at risk, and it will impact your family and loved ones.
PLEASE NOTE: The information being provided is strictly as a courtesy.When you link to any of the web sites provided here, you are leaving this web site. We make no representation as to the completeness or accuracy of information provided at these web sites. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, web sites, information and programs made available through this web site. When you access one of these web sites, you are leaving our web site and assume total responsibility and risk for your use of the web sites you are linking to.
Posted in Whole Life
Could you tell me the different between whole life and permanent life insurance? they both tax free at the end when you need to withdraw money out when the time comes? for tax wise. Which one has a better advantage?
As i do not want to see my retirement money goes down the drain?
Or pay to uncle sam depends on my tax bracket at that time?how do we escape from paying Uncle sam part of our retirement saving?
Which one has higher risk? Permanent or whole. could you explain it to me so I can made a better decision for my retirement money?
thks
tiffany
Hi Tiffany:
Whole Life is a specific form of Life Insurance. While Permanent Life Insurance is not a product but describes products that can include policies such as Whole Life, but also may include other policies such as Universal Life, Variable Life, Surivivorship Life, as well as others. All permanent forms of Life Insurance have similar or identical tax rules. They grow tax deferred, The death Benefit is income tax free. And withdrawals made up to the policies cost basis are received income tax free. Loans can be taken on the policies that will allow funds in excess of the cost basis to be withdrawn tax free. However caution about how much to borrow and keeping the policy in effect need to be taken into consideration when borrowing. Each policy and fact pattern needs to be understood before action is taken so to avoid any negative results.
As for your tax question the Life Insurance can be a very good savings plan, the cash value grows without taxation. The death benefit can be received tax free by the beneficiary. Income can be taken out of the policy without taxation as long as caution and certain guidelines are utilized, such as not withdrawing to much money, thereby risking the policies viability to stay in effect throughout the insured owners lifetime. The danger is if you end up surrendering the policy, that you made a profit on. If you did so, the gain would be taxed at ordinary income tax levels. This is the same regardless of which form of Permanent Life Insurance you choose.
If I can be of addittional help. Call me. I would be happy to try to help you. Also there is some articles on the site that I would suggest you to read regarding your questions.
http://whywholelife.com/life-insurance-asset-class-for-troubled-times/
I hope this helps.
Sincerely,
Michael Fliegelman