Life Insurance

What Is Tax-Free* Income?

"You Earn it. We Protect it."

Tax-Free Income Options
Many Wonder...

What Is Tax-Free* Income?

Tax free income may sound impossible. However, there are several options available for retirees. Proper retirement strategies and tax planning can set you up for a much smaller tax bill. Roth IRAs and certain Roth 401 (k) savings accounts may be able to be withdrawn tax free. Believe it or not, even life insurance can be part of the answer to “What is tax free income?”

does life insurance count as income
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How Life Insurance
Can Create An Income

Most people know the basics of life insurance. You buy it to replace your income when you’re gone. Putting the right life insurance in place can ensure your loved ones are financially secure. But, what most people don’t realize is this: Life insurance can provide an income while you’re still alive. 

Indeed, life insurance can be part of your strategy. It can be available in times of emergency. In addition, it can be used for college for grandchildren, or for large purchases. Amazingly, using these funds for expenses allows you to keep your other retirement savings principal intact. Depending upon policy type, life insurance can provide so much more than just a death benefit.

There are several

Types of Life Insurance

Several types of life insurance policies exist. One, called term life insurance, pays out a death benefit if you pass away within the term of the policy. Another type is max funded cash value life insurance. Generally, this type of policy allows for more flexibility.

In addition to providing a death benefit, max funded cash value life insurance policies can build cash value. In fact, some of these type of policies allow you to take money from the cash value they’ve built. Because this value is technically just an overpayment of life insurance, you are able to withdraw it, tax-free*. Additionally, some policies allow you to borrow against your cash value. In this case, the money you receive is actually a loan. Therefore, you collect it tax-free* as well.


When Is Life insurance the Answer to "What Is Tax Free Income"?

Not everyone’s retirement situation will lend itself to using life insurance as additional income. In fact, there are a few situations in which this strategy works best. Life insurance may be a good answer to the question “what is tax free income?” when one or more of the following conditions exist:

  • You are already maxing contributions to your 401(k), IRA, or other retirement plan
  • Tax-deferred strategies appeal to you
  • You’re looking for an additional “just in case” income source
  • Protection of income is needed

is life insurance taxed as income

Know Your Tax-Free* Income Options

Messina’s Wealth Management team works hard to ensure our clients have all their bases covered. Life insurance is a critical component of this. Let us help you determine the best strategy for you. Contact us for a complimentary policy review. We will review your current strategy, and make recommendations. Your legacy deserves protection. We are dedicated to helping you do just that.

What Is Tax-Free* Income for Your Heirs?

One of the biggest advantages of life insurance is that you get to leave a legacy. Since the money is an insurance policy, the tax laws are different. Your beneficiaries receive the money tax free*, in addition to avoiding probate. You work hard your whole life to protect loved ones. If you choose the right life insurance policy, it can help ensure that happens.

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"What is Tax-Free* Income?" appointment today.

Initial appointments are no-cost and no-obligation.

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