Three Tax Benefits of Life Insurance Coverage

Life insurance is a touchy subject for many of us in Opelika, AL. Some of us are worried about the price, and others don’t think they need it. Some of us can’t cut through the noise to find a good policy, and some are just plain avoiding the topic. But our agents at Elliott & Associates Insurance want you to know that life insurance isn’t some giant caterpillar in the corner that turns into a butterfly when you die. It’s possible to experience the benefits of life insurance coverage here and now. For instance, getting a policy provides the following tax benefits: 

  • Tax-free death benefit: Unless your payout passes a certain limit or a third party owns it, your beneficiaries won’t have to pay income or estate taxes on it. This means if your payout is $100K, that’s how much your loved ones will get. The government won’t touch a dime.

  • Tax-deferred cash value growth: Life insurance policies hold a cash value. This is the amount of money the policy accumulates over time, minus the insurer’s fees. Depending on the terms of your policy, you won’t have to pay taxes on this money unless you surrender or withdraw it. 

  • Tax-free withdrawals and loans: You can borrow from the cash value of your permanent life insurance policy without paying taxes. The catch is that the amount can not exceed the premiums paid.

Life insurance doesn’t have to be scary if you live in Opelika, AL. Not when you have our experienced agents at Elliott & Associates Insurance ready to help you. We will speak to you about your preferences and help you find the coverage that benefits you most. You can also check out our website for more information.