The tax advantages of permanent life insurance
In terms of tax treatment, life insurance is treated more favorably than annuities, savings bonds, CDs and other investment products.When you die, the death benefit paid out to your beneficiaries isn’t taxed.If your estate is worth more than $11.58 million — the IRS threshold for 2020 — it may be subject to estate taxes. For this reason, many high net worth individuals take out a policy to help their heirs to cover estate taxes when they die. By doing this, they can prevent their families from having to sell off other assets — like properties — to pay the tax bill.