Are there any tax benefits of life insurance? Many people may think they may have to pay expensive premiums when they think of purchasing a policy. Some insurance products generally have advantages, and with most policies there could be life insurance tax benefits that may help save you money.
One benefit is in estate taxes. The non-profit organization Life and Health Insurance Foundation for Education (LIFE) recommends using different kinds of insurance to help with estate taxes for life insurance. Life insurance tax benefits may enable you to save up money on a tax-free basis and even lower taxable assets. A death benefit may be tax-free income for your beneficiaries. By having life insurance tax benefits you could save your beneficiaries both money and time. To learn more, please read the article “How to Choose a Life Life Insurance Beneficiary.”
Having life insurance for the long term may be advisable. Your premiums could be tax-deductible and if you are self-employed, you could have a tax advantage by paying your premium via your business.
Among the many tax benefits of life insurance, you may be able to claim the annual profit you earn from traditional investments and savings vehicles as income on your tax return while retaining the profit in cash value without paying any tax. You may also be able to defer gains on annuities that provide you a guaranteed lifetime income and offer stability. An irrevocable life insurance trust (ILIT) can also help minimize estate taxes, enabling your beneficiaries to maintain more of your proceeds. There are several tax benefits of life insurance that could save you money and reap the rewards of both profit and tax deferment. Learn more about affordable life insurance low cost life insurance hub page
