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Beat The Taxman

Would you like to give more to your family and less to the government?

If your answer is "yes," you might want to consider this.

Here's the problem .

Many of us have a financial plan that includes an element of savings that you never plan to spend. You have invested some money that you intend to pass on to those you care about most.

The problem is this strategy's success is largely based on the investment's rate of return. And, unfortunately, the higher the return, the more tax you pay. This means your estate may end up smaller than you're anticipating.

What are your options?

You can continue to pay tax on the income earned from your savings or you can invest the funds using a permanent Life insurance policy.

This attractive alternative to taxable investments offers:

  • a large, immediate estate value
  • tax-sheltered growth of cash values
  • a tax-free maturity value at death
  • reduced estate settlement costs, if you've named a beneficiary
  • potential for creditor protection, if you've made an appropriate
    beneficiary designation
  • liquidity

The Life insurance solution .

The insurance solution moves savings from a tax-exposed investment to an exempt life insurance policy. A universal or whole life insurance policy provides immediate life insurance protection and an investment within the policy that accumulates on a tax deferred basis. When you die, your heirs receive the proceeds tax-free.

When you take advantage of this financial planning strategy, you not only increase the size of your estate, you also reduce the amount of tax you pay.

Here's an example of how this financial planning strategy uses Universal Life to provide a larger estate for your heirs.

Personal information

Female, age 60,
non-smoker

Before tax investment rate for alternative

6.00%

Universal Life rate of return

6%

 

Initial death benefit

$500,000

After tax investment rate of alternative

3.30%

Deposits

$25,000 per year
for 10 years

 

Personal tax rate

45%

 

Universal Life

 

 Another investment alternative

Accumulated
value

Before tax redemption value

Net estate value

Year

Annual interest

Tax
payable

Net estate
value

17,299

6,585

517,299

1

1,500

675

25,825

98,332

  64,046  

598,332

5

8,012

3,605

137,933

236,140

236,140

736,140

10

17,435

7,846

300,178

283,665

283,665

783,665

15

20,508

9,229

353,086

350,397

350,397

850,397

20

24,123

10,855

415,319

445,192

445,192

945,192

25

28,375

12,769

488,521

The Life insurance strategy can increase the amount of
cash that will go to your heirs by over
$450,000!

For more information on how Life insurance can help you "Beat The Taxman" and grow the value of your estate contact Barrons today.

This example is for illustration purposes only, while every attempt has been made to ensure the accuracy of this information Barrons or its affiliated companies cannot be held liable for errors or omissions. Actual numbers at time of illustration may vary.