Tax-Free Investing. Here’s How!


“Give me liberty or give me death” – Patrick Henry

Americans have the liberty to choose how we invest our money. Here are several reasons why you should have a financial services rep. who also knows Life Insurance:

1.) Triple-Tax Advantaged.

Specifically I’m talking about Indexed-Universal Life (IUL) and Variable Universal Life (VUL). Here are the key points as they relate to taxes:

  • Tax-free growth: You may have the option to choose to tax your initial input into the policy so that your investment can grow tax-free
  • Tax-free loans: Did you know you may be able to take money out of your IUl or VUL tax-free? We write many policies where our customers have been able to withdraw money tax-free!
  • Tax-free payout: Did you know many life insurance policies payout tax-free?

2.) Lower fees. If you have 5+ years to invest your money an IUL or VUL may be the most cost-effective way to invest! Not only do the fees usually decrease significantly after 5 years, but you also get life insurance in addition to your initial investment.

3.) Tax-free, interest-free student loans. Did you know many student loans are tax-deferred? In many cases this means yours or your child’s loans will not be taxed until they stop attending classes. Now what if I told you I can help you pay off those student loans, tax free? Here’s how:

  • Start a VUL when your child is born and begin investing to grow your investment account. When your child is ready to attend school I recommend encouraging them to take out tax-deferred loans! Keep investing in your VUL while htey attend school. When your child graduates you may be able to withdraw the total amount they owe on their loans, paying them off in-full without any interest, and you can still have additional money left over in that investment PLUS having life insurance in addition!

4.) Why life insurance over a Roth or 401K

  • First there are usually penalties for withdrawing money from your Roth or 401K before age 59 1/2
  • Your Roth/401K doesn’t come with life insurance. What if you PLAN to live to age 85 but you unfortunately are killed in a car accident at age 42? With life insurance you have a guaranteed amount paid to your family/estate ON TOP OF your investment account, and it can pay out tax-free.

5.) Why life insurance instead of a 529 plan

  • What if you or your child needs the money for something other than qualified school expenses? You will likely pay a penalty through your 529 plan to use this money for any non-qualified expenses. This is not the case with the right life insurance policy!

6.) Business key-man, heirs, partnerships and survivorship

  • Utilizing an IUL or VUL may be the best way to ensure your company survives with as much momentum as possible, and again with tax-free options!

Awesome stuff! Feel free to comment and/or shoot us questions.

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