INSURANCE
I AM 72, SINGLE, HAVE NO DEPENDENTS HAVE SAVINGS IN TAXABLE AND TAX DEFERRED ACCOUNTS (IRA’S) AND AM TAKING ANNUAL RMD’S FROM MY IRA ACCOUNTS. MY UNDERSTANDING OF THE BEST WAY OF USING PERMANENT LIFE INSURANCE TO REDUCE TAXES IS NOT TO HAVE THE POLICY OWNED IN MY NAME BUT THAT I SHOULD USE MY NAME AS THE BENEFICIARY. IS THIS CORRECT?
BASED ON MY SITUATION, DO YOU THINK THAT HAVING PERMANENT LIFE INSURANCE WOULD BE OF BENEFIT TO ME? IF SO, SINCE I HAVE NO DEPENDENTS, HOW SHOULD THE POLICY BE STRUCTURED AS FAR AS WHO IS THE OWNER AND WHO IS RESPONSIBLE FOR PAYMENT OF THE PREMIUMS?
Permalink Submitted by Alan - IRA critic on Mon, 2018-11-05 17:38
If you are single with no dependents, then no one will be financially hurt when you pass. If you remaining assets go to charity, they are income tax free. Life insurance basically provides reimbursement to beneficiaries for your early death, but if you pass early, they will get more anyway because you will not be spending it down. LIfe insurance premiums are high for elderly people, and quite possibly you are being sold something that is not beneficial to you. Ask the agent exactly how this will work to your benefit considering the expected premium for someone of your age and physical condition. I assume estate taxes are not an issue given the very high exclusion amount.