Posted: Fri Oct 10, 2008 4:28 am Post subject: Could my policy proceeds be tax-free after 10 years?
I'd like to know if there is a chance to get my variable life policy proceeds (as also the accumulated cash value) free of tax after a decade?
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Life insurance proceedings normally enjoy tax advantages till the time you withdraw them. The premium paid towards the policy also enjoys income tax benefits. However, the cash value may get subjected to taxes once you make partial or full withdrawal from the policy value.
The tax advantage, perhaps, is the most important deciding factor for the people staying in the higher bracket to invest into the variable life insurance policies. The proceeding towards the policy enjoys tax deferred benefits, ie you are not required to pay income tax on the premium amount paid towards the policy
Hi!
I've heard of certain cash value policies through which a part of the cash value could be drawn up. This withdrawal of the cash value is associated with with considerable surrender of your policy. This surrender could terminate certain elements within the policy which would even inflict a considerable lowering of its death benefit. Yes, even though such surrenders are not taxable to a certain extent as mentioned in the policy clauses, but there could be additional surrender fees attached to it. Regards, Roddick
Money can usually be borrowed from a policy on a tax-free basis. In almost every case, however, this almost always puts the policy in self-destruct mode.
Did an agent tell you money can be taken on a tax-free basis, your policy would be "paid up" in 10 years, or make any other [mis]representations regarding your future premium schedule?
If so, he/she lied. _________________ Please feel free to go to my website at www.markcolbert.com or, if you have a specific question, you can email me directly. I hope I can answer any questions you might have. If not, I can certainly find an answer right away.
