| This article is Life Insurance and how insurance may | | | | tax-free. |
| be a good thing to think about when you are | | | | Here is a great explanation of EIUL that I found on |
| considering the state of the economy and another | | | | line: |
| way to diversify your portfolio. | | | | Equity indexed universal life insurance offers a unique |
| With a lot of the news surrounding the economy and | | | | combination of affordable life insurance with the |
| how bad it is, I thought it might be a great time to | | | | ability to accumulate cash values that grow with the |
| discuss life insurance and how it might be time to | | | | upward movement of a stock index without the |
| really consider it as a way to diversify your portfolio. | | | | normal downside risk associated with the equities |
| A dear friend of mine forwarded a link to a discussion | | | | market. Combine the benefits of upside cash value |
| on CNBC about how life insurance is a good | | | | growth potential with the tax benefits associated |
| investment. Now, I have to admit, I have always | | | | with life insurance and a minimum guaranteed interest |
| known that a life policy with a cash value option is a | | | | rate and you have an optimum vehicle for |
| good product to have in your portfolio. I was really | | | | accumulating cash. |
| happy to see someone who agreed with me. | | | | The important part to understand is that you are |
| Here is the link: | | | | participating in the market, BUT you are not going to |
| Whether the economy is good or bad, you cannot | | | | be participating in the downside risk. What that |
| go wrong with a life policy that allows you to save in | | | | means is you will enjoy the gains, but if the market |
| a cash value account. Why? Because your cash value | | | | goes down, your cash value does not go down in |
| savings is tax-free! Yes, this is one of those very | | | | the slightest. You will keep all your gains and not risk |
| few places that the government still allows us to | | | | a dime. |
| save tax-free. With a guaranteed interest rate of | | | | I recommend that everyone should at least look into |
| 2-4% on most of these life policies, if you calculate in | | | | an EIUL policy as a way to diversify your investment |
| the fact that you are not going to pay taxes on the | | | | portfolio without much risk. There are many things |
| GAINS, it's a win-win situation. | | | | you need to know about an EIUL policy, and your |
| Why is tax-free savings a good thing? Here is an | | | | insurance agent can help you determine if it is right |
| example of how taxation works: | | | | for you. Some of these policies can be expensive to |
| If you take a dollar and double it 20 times and minus | | | | purchase. There are also limits to how much you can |
| the tax, you will have about $28,466 left. | | | | put in this account each year, but the good news is, |
| But, if you take that same dollar and double it 20 | | | | the amount you can save within the policy is always |
| times, without tax, you will have about $1,048,576! | | | | more then the annual limit on an IRA. Also remember, |
| This example should show you the power of saving | | | | this is tax-free savings, not tax deferred. |