There are many changes to the tax landscape of the US on the horizon during the next few years of the current administration.
One of the largest potential changes will be a 5% increase on the marginal capital gains tax rate for high income earners. Those with higher income who are still looking to take advantage of market returns while not wanting to pay higher taxes will be good candidates for an indexed universal life policy. Contributions into the policy are post-tax dollars but grow in tax-deferred accounts. At the time of distribution, they can be withdrawn tax-free by way of policy loans, helping clients avoid paying additional taxes on the gains.
Because the account growth is based on the returns of an index, the client can still enjoy market returns and upside potential without having to worry about downside risk, while also minimizing their tax burden.
If you have clients who are higher income earners and might be subject to this tax increase, give us a call and let us show you how to structure an Indexed life insurance policy that works for them.