Permanent life aims to provide protection and growth. The cash that builds in these policies is not taxed until it's withdrawn, and you can avoid those taxes by taking a loan against the account, which reduces the death benefit. This is its main advantage. Here's more on cash value life insurance."Critics will say, 'You'll pay interest and also you're removing cash value and putting the policy at risk of lapsing.' There's some truth to that," says Drury. You want to prevent a lapse. When a policy lapses and you've borrowed money from it, the IRS looks at that withdrawal as income, making it a taxable event.
3 Insurance Policies That Could Help Pay For Retirement
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