It’s Just Math: Tax Efficient Planning with Life Insurance


It’s Just Math: Tax Efficient Planning with Life Insurance

People in our industry like to make things complicated. But, what we do isn’t complicated. It’s mostly just math. Plain and simple. 

 

For our July webinar, I posed a simple question: 

 

Is there a better way to own a non-qualified investment?

 

The simple answer: Yes! In many cases, cash value life insurance is a more tax-efficient solution. If you missed the webinar, you can watch the replay to see the breakdown of the numbers. But, it was easy to see that tax treatment of cash value life insurance – thanks to IRC 7702 – makes it a more efficient savings tool than many non-qualified investments.

 

For our purposes, we used the S&P 500, but you can compare the efficiency of life insurance with ANY non-qualified instrument. With funds that have high turnover rates or high interest income, the comparison is even more compelling – cash value life insurance, when properly structured, is usually the more tax efficient savings tool. 

 

The proof is in the pudding. Still don’t believe me? Go ask your tax advisor. 

 

This is the reality for most of your high income clients who have maxed out their qualified investments. I’m not this insurance zealot that says everyone should own cash value life insurance. This savings strategy is for those with higher incomes who are looking to accumulate funds more tax efficiently. And, it’s efficient for your business, too – because your clients’ taxes will come out of your assets under management. 

 

Finally, wouldn’t you rather own an instrument that gives you something in return? Other instruments aren’t going to give you a death benefit – they’re going to give you a 1099. Think about that. 

 

You see, tax efficiency isn’t complicated. It’s just math. Want to know more? Watch the replay or reach out directly – I’d be happy talk about how we can help you tell this story with your clients. 

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Tax-Efficient Planning for the Future

About the Author

Tim_Ash_atrium.jpg Tim Ash is known as a visionary in the financial services community. He is an industry leader who envisions a future where insurance is easy, affordable and an essential part of a sound financial plan.  As CEO of Ash Brokerage, Tim has fostered an environment of success with team-focused empowerment and client-centered service. He has built a culture where people not only believe in what they do, but more importantly, they understand the reason behind their efforts.