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An innovative investmentIf you’re like most people, your future financial security is one of — if not the — most important consideration in your investment planning. Perhaps you will have children to send to college or elderly parents to care for, or maybe your primary concern is your own comfortable retirement. Whatever your future needs, single premium life insurance can probably help you meet them.Single premium life lets you accumulate funds for the future without current taxes and still gives you access to your money. And it’s also a way to pass your estate on to your heirs, income tax free.Th is contemporary financial planning product is not meant to be a primary form of life insurance. Rather, it should be seen as a supplement to your existing life insurance that can also provide a variety of living benefits.Unlike other insurance products, single premium life does not require ongoing premium payments. With a single premium of $5,000 or more, you purchase a completely paid-up life insurance policy.You’ll have a choice of how your premium is invested. Some policies lock in a set interest rate for a certain period of time. With other policies, you car- invest your premium in a stock, bond, government security or money market portfolio, and you can switch between accounts as your needs change. In addition, the growth in your policy (accumulated earnings) is not taxed as long as you own the policy. You only pay taxes on your earnings should you choose to “cash in” your policy. This tax-deferred growth is particularly attractive since tax reform has eliminated the preferential treatment of capital gains.There is also no fixed death benefit with single premium life. Instead, the death benefit is a multiple of your cash value, which means it will increase as your cash value grows. Your death benefit will always be more than your cash value, which makes single premium life an effective estate planning tool. By using the money you want to pass Dn to your heirs to purchase a single premium policy, you can immediately increase the amount they will receive at your death. And the death benefit is passed on to your heirs income tax free.You can also borrow against the cash value of your policy at any time. These loans cost very little (usually from 0% to 1%) and are not subject to current income tax. And you don’t have to repay your policy loans, because the insurance company will reduce your death benefit by the loan amount.If you think single premium life insurance may be able to meet your financial goals, contact a professional investment broker. He or she can provide you with current information on the rates and death benefits available.This article was provided by Ben Tanksley and Mary Ann Moses of A. G. Edwards Sons.
Newspaper Details
Marfa Independent and Big Bend Sentinel
Marfa, Texas, US
Thu, Sep 10, 1987
Page 7
Full Page
Clipped by
Michael F.
USA 26 Feb 2024
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