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Life Insurance – A Way to Increase Wealth

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life Insurance grows wealthLife insurance is a great way for the rich to make the most of their after-tax wealth and have more money to inherit. Experts at, a leading San Diego insurance and finance company explain here why and how insurance helps grow wealth.

Tax Laws are in Favor of Insurance

Tax laws spare life insurance premiums and enable the wealthy to protect their assets. The returns of life insurance are tax-free. Rich people don’t want their death to become financial burdens on their heirs and so, death benefit is a major part of life insurance. However, there are many other benefits of life insurance for growing wealth.

If a policy holder has an estate under $5.45 million for a single individual and $10.9 million for a couple, it is exempted from the federal estate tax. What if the estate is above $10.9? In that case, the heirs can use a large life insurance policy to pay a tax bill for individuals whose estate exceeds the threshold of estate tax exemption.

Insurance premiums are free from estate taxes. If a rich person pays a premium of $500,000 for an insurance policy worth $2 million, the initial payment of premiums are taken from the estate and are nor taxed.

Another way to look at life insurance premium is, $300,000 is the after-tax value of $500,000, thus for $200,000 (premium amount $500,000 – estate tax $300,000) the family gets a $2 million life insurance payout.

Life Insurance is Wealth in Itself

Life insurance is not just a death benefit. It may have an intrinsic value. So, when it is not required, it can be sold. Properly structured whole life insurance can provide fixed tax-free dividends. Several insurance companies are in business for up to a hundred years. The cash value of the policy also increases and can be utilized as your private bank for various income-earning activities.

With a whole life insurance policy, you get a guaranteed death benefit regardless of your health in the future. This is an important security for the policyholder’s family and heirs.

Life insurance is thus a great tool to increase your wealth. Make the most of it to lead a wealthy and happy life.

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