shopify analytics ecommerce
tracking

Whole Life Insurance Tax Advantages

Tax Advantages Of Owning Whole Life

The tax advantages of owning whole life insurance. Writing about taxes is something that I tend to avoid simply because tax laws can change at any time. I just don't want to mislead anyone, especially on such a delicate topic.

One thing that seems to remain constant is the relationship between taxes and the permanent life insurance policy...to be more specific the whole life insurance policy.


There is nothing more important than your family's security. What would happen to your family if you died? Would they be provided for? Compare Quality Quotes and Save up to 70%! The process is Fast, Easy and FREE. Get Quotes


Tax Advantages Related To Whole Life Insurance

The main reason for buying any life insurance policy is to protect your loved ones in the event of your untimely death. A whole life policy tends to fit the bill perfectly, even though it costs more than term insurance. There are certain tax advantages to owning such a policy that a purchaser should consider.

The Death Benefit

If properly set up the death benefit of your whole life policy is paid to your loved ones free of income taxes. Your proceeds may be distributed in a lump sum or in the form of a monthly income.

When writing the laws the lawmakers took into consideration that the proceeds of life insurance policies were paid to beneficiaries of a deceased breadwinner.

Huge chunks could have gone to pay taxes but I believe the choice was made to pay out the proceeds free of Income Taxes, as well as Federal Estate Taxes, so that things would be easier for the recipients...more often than not women and children.

Cash Values

Some consideration was also given to the owner of the life insurance policy which in most cases is the one who earns the larger portion of the family's income. Cash values of life insurance accumulate interest over the life of the policy.

Dividends accumulate interest as well. Dividends are not guaranteed. The interest on both cash values and dividends accumulate free of income taxes.

The owner, premium payer, does not have the burden of additional taxes while the policy is in force. The taxes are paid when the policy is turned in to the company for its cash value.

Policy Loans

Once your whole life policy has a cash value the owner is allowed to take a loan from the policy within certain limits. These loans are usually repaid over a period of time at a rate that is comfortable for the owner of the policy.

If an insured dies before the loan is repaid the amount owed is usually deducted from the death benefit. Tax consequences may apply in this situation.

It used to be that the American people considered saving money very important but things have changed. The percentage of people who have significant savings is at the least bothersome.

Taking into consideration the tax advantages of owning whole life insurance allows you to see this type of policy in an entirely different light.

Whole life insurance can turn out to be a good vehicle through which to accumulate some cash. To say this is a great way to invest would be untrue but it can be a great way to protect your family.


Don't pay too much for life insurance! Shop and compare Quality Quotes from Quality Carriers first. Just answer a few quick questions then get your Quotes. The process is Easy and FREE. Click Here To Get Quotes


Home | Whole Life Insurance - Tax Advantages | Life Insurance Articles | Term Life Insurance | Universal Life Insurance

Tools And Resources

Life Insurance Need Calculator

Recent Articles

  1. Term Life Insurance Conversion - Term To Permanent Insurance

    A few years ago you purchased your term life insurance policy. You pay a very inexpensive premium. You have recently discovered that a hereditary disease will likely rear its ugly head.

    Read More

  2. Term Insurance Policies Explained - How Term Life Policies Work

    Interested in term insurance policies? Want to know how they work? Take a quick look and see which one best fits your needs. Term insurance is temporary insurance. Term policies, in other words, offer…

    Read More

  3. Term Insurance Details - Term Life Insurance Policies Explained

    Want to know how term insurance works? Want to find out which policy, term or permanent, is best for you? What I want to do here is give you a basic and general outline of term life insurance policies…

    Read More

  4. Term Insurance Quotes - Best Term Life Insurance Quotes

    Term insurance quotes from high level life insurance companies should be the order of the day for anyone seeking life insurance. There are about 2000 life insurance companies willing to sell you a pol…

    Read More

  5. Life Insurance No Exam - Life Insurance Without Physical Exam

    Want to buy some life insurance no exam required? It is much easier to get than most people think. Yes, the life insurance company protects itself but if you give them the facts you will get a good po…

    Read More