Ask Questions Before Replacing a Life Insurance Policy

Ask Questions Before Replacing a Life Insurance Policy

Life insurance is complex financial tool, which is unique in the way it provides financial stability and security for an insured’s beneficiaries. With this being said, every decision about one’s life insurance policy should be carefully looked over. Replacing one’s life insurance policy for another policy is one of the biggest decisions you can make. It could either be a very good or very bad decision, which is why you should ask yourself the following questions.

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When Taxes Will Apply to a Life Insurance Death Benefit

When Taxes Will Apply to a Life Insurance Death Benefit

The common misconception is that life insurance is not subject to taxation, which is half-true and half-false. Life insurance is almost always not subject to income taxation; however, under current tax law (2003), it is still subject to estate taxation. As a general rule, life insurance death proceeds are excusable from the beneficiary’s gross income (IRC Sec. 101(a)(1)). Death proceeds from single-premium, term life insurance, periodic-premiums, or flexible premium life insurance policies are received income…

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What Is Premium Financing In the Life Insurance World?

What Is Premium Financing In the Life Insurance World?

Premium financing has been around for years in the life insurance industry and has been heavily promoted, especially among wealthier clients. This arrangement involves an outside – third party – lending sources like a bank or hedge fund paying the premiums on a life insurance contract. The unique characteristics of premium-financing arrangements are: · The loan is assumed to be renewed until death. · The insurance proceeds are relied upon to be sufficient to repay…

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What Is Life Insurance Inside a Qualified Plan?

What Is Life Insurance Inside a Qualified Plan?

Qualified retirement plans are designed to encourage employees to save money now, so that they will have enough to sustain themselves when they are no longer working. A plan like this meets all the requirements of the Internal Revenue Code, which means it is eligible for certain tax benefits. In simpler terms, a qualified plan is a tax-favored accumulation vehicle like permanent (cash value) life insurance.

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