In the simplest of terms, a policy loan is an advancement of money that the policyholder must pay back under the terms of the policy. In 1986, The Tax Reform Act (TRA) magnified the tax ramifications of policy loans, which added new penalties and ultimately made this issue more complex.Read More
There are certain tax consequences that come from getting a monetary settlement, which need to be addressed when preparing your annual income tax return. Policyholders eligible for compensation are usually given several options – depending on their life insurance company. The tax ramifications will also depend on the method you choose.Read More
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…Read More
Consumers approaching retirement may be faced with various investment decisions.
Purchasing a life insurance policy is one option for those hoping to ensure their survivors’ financial security. Traditional and Roth IRAs may also be beneficial. However, rolling funds from a 401(k) to this kind of investment may be difficult for some, according to a recent report by the Wall Street Journal, with many employers hoping to hold onto their workers’ savings.Read More
Life insurance is widely recommended as an important financial protection for families in the event that a parent or other provider dies prematurely. However, people who do end up as the beneficiaries of a life insurance policy may not always know how to proceed when it comes to taxes.Read More