The Concept and Importance of a Life Insurance Policy-Part 1

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PostPosted: Mon Mar 09, 2009 1:07 pm   Post subject: The Concept and Importance of a Life Insurance Policy-Part 1  





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benzino007
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PostPosted: Mon Mar 09, 2009 11:15 pm   Post subject:   

First of all, while I appreciate your posts, life insurance is NOT an investment, offers NO TAX DEDUCTIBILITY for individual policies, and per the IRS guidelines, cannot legally be referred to as an investment.



Secondly, gains received over and above the premiums paid through life insurance cash values are not taxed as capital gains; they are instead taxed at ordinary income taxation rates.



I am kind of curious as to whether you are educating clients in this same manner?



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PostPosted: Tue Mar 10, 2009 3:55 pm   Post subject:   

I'm not sure if life insurance is an important part of your investment portfolio (maybe some whole life insurances), but i know it is important in your retirement portfolio. Life insurance is very important to have because it prevents your loved ones (spouse) from having to use their retirement savings for burial costs and other end of life costs (such as mortgages and large unpaid debts).

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PostPosted: Tue Mar 10, 2009 7:23 pm   Post subject: life insurance  

Insteacher, you are absolutley correct. However, I do see where the origional poster could have gotten mixed up. For most people anything they spend money on with the intent of getting out more than what they put in is concidered an investment. According to the IRS and the SEC this is obviously not the case. A Variable universal life policy could be mis interpreted as an investment because its future value is based on the performance of an index or portfolio. The cash value is also concidered to be an asset that can actually be borrowed against.



Another form of life insurance that could be concidered an investment are annuities fixed, indexed and variable.

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PostPosted: Wed Mar 11, 2009 4:47 am   Post subject: insurance  

Life Insurance, Universal Life, etc: ..I do have to say some of this can get very confusing on which one people should pick, that meets their family's needs. Can someone tell me the difference please? I've been looking into Life Insurance policies for a while now. I'm just SOO overwhelemed!!

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PostPosted: Fri Mar 13, 2009 6:50 am   Post subject:   

Quote:
Can someone tell me the difference please? I've been looking into Life Insurance policies for a while now. I'm just SOO overwhelemed!!




I can direct you towards a good discussion on type of insurance. Though this dialogue was mainly on term vs whole life, IMO it would clear some of your confusions regarding life insurance policies.



http://www.ampminsure.org/life/term-wholelife-1.html



~Jeremy
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PostPosted: Fri Mar 13, 2009 10:56 am   Post subject: insurance  

Thanks, JEREMY. I had a chance to look at it. Numbers can be alittle scary ( lack of a better word), but, I get the 'gist' of it.

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PostPosted: Mon Mar 16, 2009 10:34 pm   Post subject:   

Quote:
I am kind of curious as to whether you are educating clients in this same manner?
What he's doing is copying and pasteing articles from the net...this one included....and this will no longer be tolerated. I'm locking this thread.


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