Assuming federal estate taxes will be reimposed in 2011, (which life insurance companies, lobbied for), folks have always bought life coverage lo pay the tab.
Other than for paying off estate taxes, some life salesmen are pushing big amounts of whole life coverage where the insured borrows against cash value that accrues tax free. Sounds good, provided you can borrow at a rate below what you earn at the insurance company.
Very iffy with regard to observing tax regulations: This is a matter for you and your CPA. There are cheaper types of life insurance protection. The cheapest is term, which offers protection only and no savings feature.
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