Tax- Free Retirement Income Using Personal Life Insurance

In theory, any permanent life insurance policy, in addition to solving a client's need for a death benefit, has the potential to generate tax-free retirement income through withdrawals or loans.  However, certain  types of policies lend themselves particularly well to this purpose.  Contact me for more information.

The use of cash value life insurance to provide a tax-free resource for retirement assumes that there is first a need for the death benefit protection.  Policy loans and withdrawals reduce the policy’s cash value and death benefit and may result in a taxable event.  Withdrawals up to the basis paid into the contract and loans thereafter will not create an immediate taxable event, but substantial tax ramifications could result upon contract lapse or surrender.  Surrender charges may reduce the policy’s cash value in early years.