Here are the top five life insurance plans every financial advisor, CPA and attorney must know:
5. Max-funded non-MEC IUL
The MEC rules under 7702 took the fun out of life insurance as an investment. However, with careful planning, a producer can structure a policy which is a non-MEC and maximum-funded. Why? The policy will allow tax-free distributions up to basis and generally wash loans after that as distributions from the policy. In the meantime a client can enjoy basically tax-free buildup inside the policy. The variations are non-MEC IUL,VUL and UL. It competes favorably with CDs, municipal bonds and U.S. Treasuries, but it also has a death benefit.
4. Life with living benefits
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In a world where health costs continue to rise, life insurance companies now offer life insurance with living benefits. Benefits for long-term care, disability and health care are taken from the face amount of the policy. Once again, this allows for tax-free buildup inside the policy but provides health benefits, as well. In addition, the life insurance policy can be converted to a lifetime income; check the annuity conversion rates at the back of the policy.
3. The Section 79 plan