Tax Advantages

Some financial products structure tax benefits using a variety of complex and risky arrangements. Conversely, for people who want to enjoy simple tax advantages along with guarantees, whole life can't be beat. The significant benefits are:

• All death benefits are income-tax free
• the Cash Value within the policy builds on a tax-deferred basis
• Dividends accumulate on a tax-deferred basis
• Access to policy values on a tax favored basis
• The cash values of life insurance policies may generally be accessed on a tax-favored basis by the withdrawal of dividends or through policy loans
• Withdrawal of dividends from the policy is permitted on a First-In First-out Basis (FIFO). This means that the first dividends paid out to the policyowner are considered a return of cost basis.
• All of a policy's cash value may be borrowed from a policy without the triggering of income tax on any gain that has been borrowed from the policy.

Normally, the value of tax benefits increases as your tax bracket rises. This is not the case with whole life.The tax value actually increases with the amount of protection you choose, because life insurance beneficiaries generally receive death benefits income-tax free. Even if you are in a modest tax bracket now, income tax savings on insurance benefits can be substantial. This can make whole life an efficient way to plan your estate, while protecting its value under the guaranteed features.