From Avantax: Can Life Insurance Help Minimize Taxes for You and Your Family?

From Avantax: Can Life Insurance Help Minimize Taxes for You and Your Family?

04/29/2022 Tags: Announcements


As your financial plan becomes more complex, your insurance needs may change with it.

When you’re just starting out, the primary focus is often on protecting your family if something should happen to you. Although that may continue to be a concern throughout your lifetime, as your situation changes, the right insurance solutions can often change as well.

For example, you may consider a death benefit simply for the protection of loved ones, but it can also be a powerful tool to help maintain your lifestyle in retirement, pay off a mortgage or other debts, fund your long-term care needs, or offset state and federal taxes. There are even opportunities to provide a death benefit for family members and provide income for you at the same time. Built-in flexibility is an often-overlooked opportunity when choosing the right life insurance.

INSURANCE AS A TAX SOLUTION

Imagine you’re retired and no longer need to worry so much about the financial needs of your family. If required minimum distributions and income from investment accounts have you worried about bumping into a higher tax bracket, you could withdraw income from an overfunded cash-value insurance policy instead of your investment accounts for a tax-free way to support your lifestyle.

Overfunding a cash-value insurance policy can also be a good opportunity to invest with tax diversity — especially if you’re already maxing out your retirement plan contributions and have additional income you are looking to save for retirement. Your insurance investment will accumulate tax-free. And if you do pass along a death benefit to your family, they can benefit tax-free as well.

IS THE TIME RIGHT TO REVIEW YOUR INSURANCE PLAN?

Ask yourself these questions to determine if a review might benefit you and your family:

  • When was the last time you reviewed your life insurance policy with a financial professional?
  • How has your life changed since the last time you talked to your CPA or financial pro?
  • What are your family’s top priorities today? How will they change in the next five or 10 years?
  • Do you know the reasons why your life insurance policy might lapse?
  • Does your current policy have features to meet extended care needs?

Whether you’re in the market for a better insurance solution, or you simply want a complimentary review to see if the products you have currently support your financial situation, contact us. We’re happy to discuss ways to help maximize the benefits of insurance as part of an overall strategy.


Investment advisory services are offered through Avantax Planning Partners℠. Commission-based securities products are offered through Avantax Investment Services℠, Member FINRA, SIPC. Insurance services offered through licensed agents of Avantax Planning Partners. 3200 Olympus Blvd., Suite 100, Dallas, TX 75019. The Avantax entities are independent of and unrelated to CP Financial Services, LLP. Although Avantax does not provide or supervise tax or accounting services, our Financial Professionals may offer these services through their independent outside business. Not all Financial Professionals are licensed to offer all products or services. Financial planning and investment advisory services require separate licenses.



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At Casey Peterson, LTD, we understand not everyone loves the complexities of accounting like we do. That's what sets us apart from the rest. Our CPAs, accountants, and financial advisors truly love numbers, solving problems, and creating business and financial strategies for our clients.

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