Second-To-Die or Survivorship Life Insurance became a very viable product after the 1982 TEFRA legislation. This act allowed estate taxes to be postponed until the survivor passed away, and for the taxes to be paid at a discount.
Life Settlements are relatively young transactions in the insurance industry, but you can trace its origins back to 1911. Supreme Court Justice Oliver Wendell Holmes noted in his opinion that "Life insurance possessed all of the ordinary characteristics of property, and therefore represented an asset that a policy owner may transfer without limitation."
Hanging it up at age 60 or 62 sounds like a lot of fun! Wake up when you want to, tee it up once or twice a week and enjoy the grandchildren. Even though I will be 68 on Nov. 2, I'm not quite there yet. I can't buy enough liability insurance to get on the golf course!
One of the provisions of the Revenue Code that is very attractive to life and annuity policyholders is Section 1035. This provision of the Code allows you to transfer the values from a life policy or an annuity to a new contract and defer taxes on your gain. Life policy values may be transferred to a new life policy or a non-qualified annuity. A non-qualified annuity may also be transferred to another non-qualified annuity, but annuity values may not be transferred to a life policy.
Throughout my career I have seen ongoing recommendations to ladder your investments and savings to generate consistent, long term income. Just envision each step on the ladder being an asset and you've got the laddering idea.
In previous articles, I reviewed both the positives and negatives of using life insurance as an investment vehicle. This time, I would like to discuss what life insurance does best as an investment, and that is, self-completion at any time while the contract is inforce.
Many years ago, I was given a "Pocket Pig" from Newton Federal Bank and still have it along with other Covington and Newton memorabilia. It held 16 quarters and "If this Pocket Pig could talk he would say, save a little every day." Sixty years later, that's still great advice – Pay yourself first!