The biggest secret of the rich is they keep their money in places the IRS cannot touch it. The wealthy stay wealthy because they can keep a good portion of this money in liquid assets. In other words, money they can access in a hurry if they need it. They know keeping money in the bank is the fastest way for it to be taxed. However, keeping it in a life insurance policy, that offers cash value based on the S&P 500 or another index, is tax free!
So why is it, more people don't know about life insurance and the tax free advantages of it? I think it's because everyone wants to run away and hide when the life insurance people come around. Everyone is so afraid to talk to the "death insurance merchant" that they never hear about all the cool stuff you can do while you are still alive, with life insurance!
So let's talk about the fun part of insurance, the tax free/tax deferred coverages that can make you money, tax free/tax deferred! First, we need to explain how these policies work, how they can make you money and protect you and your loved ones from catastrophic personal loss.
When it comes to life insurance backed products like Annuities, IUL's and Participating Life, even Whole Life, think of these like an insurance policy with a savings account attached. Or you could think of it as a savings account that will turn to life insurance when you pass away. Annuities are for retirement planning. You set up how long of a period of time you will contribute to your annuity along with a minimum payment so you can meet your financial goal. During the accumulation period, which is the time you are putting money into the annuity, you can make additional deposits, as many as you like. What makes it better than a savings account is the higher interest rates and how those rates are calculated.
Information on IUL and Participating Life goes here