THE INFORMATION IS NOT AN OFFER TO SELL OR SOLICITATION OF ANY KIND OF INSURANCE (FIXED PRODUCTS). PRODUCTS AND SERVICES REFERENCED ARE OFFERED AND SOLD ONLY BY APPROPRIATE APPOINTED AND LICENSED AGENTS. THE MATERIAL HAS BEEN PREPARED FOR INFORMATIONAL AND EDUCATIONAL PURPOSES ONLY. IT IS NOT INTENDED TO PROVIDE, AND SHOULD NOT BE RELIED UPON FOR ACCOUNTING, LEGAL, TAX OR INVESTMENT ADVICE. PLEASE CONSULT A PROFESSIONAL WITH AN EXPERTISE IN THESE AREAS REGARDING THE APPLICABILITY OF THE INFORMATION PERTAINING TO YOUR SITUATION. BY RESPONDING TO ANY INFORMATION YOU MIGHT FIND INTERESTING, YOU AGREE TO BE CONTACTED BY A LICENSED INSURANCE AGENT REGARDING RETIREMENT INCOME PLANNING AND/OR LIFE INSURANCE PLANNING. PERCENTAGES REFER TO EITHER FIXED OR INDEXED ANNUITY CREDITING RATES OR LIFETIME INCOME WITHDRAWAL AMOUNT BASED UPON YOUR INITIAL PREMIUM AND MAY ALLOW THE OWNER OF AN ANNUITY TO WITHDRAW UP TO A CERTAIN PERCENTAGE OF THEIR INITIAL PREMIUM PER YEAR FOR THEIR LIFE TIME. THIS WITHDRAWAL RATE MAY NOT BE AVAILABLE FOR ALL APPLICANTS AND CAN VARY BASED UPON YOUR AGE, STATE, THE START DATE OF YOUR LIFETIME INCOME, AND OTHER FACTORS. PERCENTAGES CAN ALSO REFER TO POTENTIAL CREDITING RATES FOR AN INDEXED LIFE INSURANCE POLICY. NOT ALL PRODUCTS AND SERVICES ARE AVAILABLE IN ALL STATES.
NOT FDIC INSURED. NOT BANK GUARANTEED. MAY LOSE VALUE, INCLUDING LOSS OF PRINCIPAL. NOT INSURED BY ANY STATE OR FEDERAL AGENCY.
All information contained herein is for informational purposes only and does not constitute a solicitation or offer to sell securities or investment advisory services.
It is not our intention to state or imply in any manner that past results and profitability is an indication of future performance.
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE SUCCESS
A list of all recommendations made within the immediately preceding twelve months is available upon written request.
Permanent life insurance such as Indexed Universal Life Insurance offers in general tax-deferred growth on the cash value. There are several methods of utilizing your policy’s cash value. Each has advantages and disadvantages and is subject to different tax consequences. Surrenders of, withdrawals from, and loans against a policy will reduce the policy’s cash surrender value and death benefit and may also affect any dividends paid on certain policies. As a general rule, surrenders and withdrawals are taxable to the extent they exceed the cost basis of the policy, while loans are not taxable when taken. Loans taken against a life insurance policy can have adverse effects if not managed properly. Policy loans and automatic premium loans, including any accrued interest, must be repaid in cash or from policy values upon policy termination or the death of the insured. Repayment of loans from policy values (other than death proceeds) can potentially trigger a significant tax liability and there may be little or no cash value remaining in the policy to pay the tax. If loans equal or exceed the cash value, the policy will terminate if additional cash payments are not made. When we use the words “tax free” we are referring to taking income tax free loans from permanent life insurance in a manner that does not trigger a lapse of the insurance policy.
Policyowners should consult with their tax advisors about the potential impact of any surrenders, withdrawals, or loans.
Kelly, Patrick. Tax-Free Retirement: 10th Anniversary Edition. IRS: IRC Section 101(a), IRC Section 72(e)(5)(C), IRC Section 72(e)(6), IRC Section 7702(g), IRC Section 72(e)(5)(E)
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