Double Duty Dollars of Life Insurance: The Art of Tax-Free Retirement Income

By JOHN HARRISON
Published 2/15/2010

If I could describe life insurance in one word it would be “flexible.” A permanent life insurance policy provides the policy owner with a combination of death benefit protection and income distribution that are unmatched by any other product.

Life insurance death benefit proceeds are generally excludable from the beneficiary’s gross income for income tax purposes. There are few exceptions, such as when a life insurance policy has been transferred for valuable consideration. But the potential income distribution is equally significant because of the tax advantages that apply to a policy’s cash value.

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