The Lunsford Agency 69 West Second Street, Chillicothe, OH 45601

Tax Advantages Of Life Insurance

Life insurance is a unique product and as such receives some unique tax advantages. Some may wonder why but the answers are really very simple. The insurance industry is the largest buyer of bonds in America and in fact, they bought more than half of all bonds issued. They invest hundreds of billions of dollars each year which helps our economy. In total the insurance industry has $7.2 trillion invested. There are 781 insurance companies in the U.S. They employ more than 2.6 million people. Other than the federal government, the insurance industry provides more money to American’s every day in one form or another.

More than $224 million a day is paid out to people from their annuity accounts

More than $210 million a day is paid out to beneficiaries from life insurance policies

Another $52 million a day is paid in disability benefits and another $3 million per day for long term care.

The insurance industry is paying about $182 billion per year to policyholders. No other business other than the federal government pays out so much money to help people. Here are a few important points to keep in mind when reviewing your life insurance contract:

  1. The death benefit is paid to your beneficiary tax free.
  2. The cash value grows on a tax deferred basis.
  3. A policy loan can occur with no tax ramifications.
  4. The death benefit bypasses probate.

Should you have term life or whole life insurance? I can help you design a plan that works for you.

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