« BackArticles

Insurance - An Attractive Alternative Investment

A PERMANENT LIFE INSURANCE POLICY offers a very desirable alternative investment for some of our clients. Its unique characteristics place it above and beyond other traditional investments; however it is a tax-deferral investment strategy that is often overlooked.

1. Proceeds can be free of income tax (what will tax rates be in the future?)
2. Cash value builds up tax-deferred
3. Proceeds (cash value) can be shielded from creditors
4. Policyholder can draw on the cash value
5. Life insurance allows owner to turn “periodic premium” payments into a “capital sum”.
6. The vehicle can be structured as a 2nd-tier retirement program yet not encumbered with Erisa guidelines (no limit as to contributions, no IRS distribution requirements, etc.)
7. Premiums can be paid from a corporation (via the employee) with deductions for the company and tax-advantages for the employee!

It is important to remember that:

One must use the correct Universal Life with NLG and/or participating Whole Life.

Persons who hire “investment managers” typically hold large amounts of life insurance funded with “capital” rather than “budgeted income”. If it works for the super-rich, it might be worth considering the options of such an investment.

One needs to seek the advice of a highly trained advisor to take advantage of this unique opportunity.