Income Tax Free Life Insurance Benefits

Another nice thing about life insurance is that unlike aspects of inheritance proceeds that may be subject to inheritance tax, the proceeds of a life insurance paid to a beneficiary are completely income tax free! What a bonus for the insured to realize that if they want to leave behind a certain amount of money for their loved ones that it won't be $XXXXXX.00 less tax but rather the full amount.

A full 100% of what the insured intended to pass on at her death with absolutely none of it going to local, state or federal governments. How nice to know that no government agency is going to be able to interfere in your intention to leave behind a cash legacy to those that you love and/or respect in your business relationships.

This income tax free benefit is also used in many instances of creative financing for business relationships as being a much more cost effective way of selling off a stake in a business venture with insurance proceeds instead of after tax dollars left behind as part of an estate. Knowing that 100% of the proceeds are going to a specific person or

entity for a specific purpose and actually having a cash outlay much less than the policy amount is a very attractive alternative for many people.