Buy Life Insurance and Avoid Inheritance Taxes!

Securing that your dependents will have sufficient funds after your death must be a top priority. Death of a dear person presents not only emotional aspects, but also dangerous financial negative consequences. Things can get even more tragic if that person was the sole breadwinner of the family.

Accounting Series - Reviewing Tax BookletPersons who earn an income must be protected by life insurance. They must carry the policy, since they have access to money. Moreover, you can buy life insurance and avoid inheritance taxes.  So, besides being a savings vehicle, life insurance for elderly can be used as heirloom.

The first problem is to decide what type of insurance to buy. If your goal is to obtain tax-free money for your beneficiaries, we recommend you permanent insurance, especially whole life insurance plans. All the money saved and earned through whole life insurance is tax-free. Besides a saving component, it has an investment component which in turn can add money to cash value or death benefit.

Or you can simply tap in the money. But let us focus on death benefit. All money used to reimburse the beneficiary is tax-free.  Inheritance taxes, also known as death taxes, occur after a person has received payouts or benefits upon the death of a person. If you received money through a legalized will, it is likely to be taxed.

And in most states, inheritance taxes are levied by the states. This means that the heir will be taxed twice, first by the federal state tax and then by the state inheritance tax.   If you want to leave a considerable sum of money for your dependents, you can do this through life insurance. Unfortunately, all other properties and objects received as inheritance will be evaluated and the state will tax them

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