Do You Really Want to Pay for Life Insurance for Your Entire Life?

According to tpgbrokerage.com, an indexed universal life policy is structured so that one can "access the policy funds tax-free."  Imagine someone within your own family trying to access their policy funds tax-free.  When they need the money at a critical time, they are told that they can only access their policy funds tax-free if they continue to pay for life insurance coverage.  Do you really want to pay for life insurance coverage your entire life?  Are the benefits worth the sky rocketing prices?

Or worse, imagine that they "access the policy funds tax-free" which really means taking a loan.  Those of you who understand how these policies really work understand this.  Then, imagine that with this additional liability on their plate, they decide they don't want to continue paying the sky rocketing cost of life insurance.  Now, they cancel their policy and can be hit with taxes.  So much for tax-free access.

According to www.investopedia.com, "In addition, when you surrender your policy for cash, the gain on the policy is  subject to income tax, and if you have an outstanding loan balance against the  policy, additional taxes could be incurred."

Do you know someone who has a personal story like this?  Start the dialog.  Protect yours and those around you.  Get the right type of life insurance coverage.  Thanks for reading!  We will see you soon!

This post was reposted from http://finlit.biz/life-insurance/do-you-really-want-to-pay-for-life-insurance-for-your-entire-life/, originally written on March 16th, 2013.