Financial
You may have heard of a Roth IRA as a good option for retirement planning. Its favorable tax treatment allows after-tax contributions, tax-deferred growth, and tax-free distributions at retirement. The drawback? A Roth IRA is not available for everyone and has limits to how much you can contribute.
But another vehicle that may be able to provide you with features similar to a Roth IRA – along with other benefits – is permanent life insurance. Take a closer look at how permanent life can differ from a Roth IRA:
Eligibility
Life insurance doesn’t have income limitations like a Roth IRA. The income limit for a Roth IRA is subject to change annually.
Contributions
Volatility
Distributions
Next steps
The purchase of a permanent life insurance policy is a long-term commitment and is subject to underwriting approval. Life insurance policies contain exclusions, limitations, reduction of benefits and terms under which the policy may be continued in force or discontinued. For complete details of coverage, contact the company for additional information. Before purchasing any permanent life insurance policy, you should request a policy illustration and carefully compare both the guaranteed and non-guaranteed elements.
Life insurance cash values grow without being subject to current taxation. Cash values can be accessed by way of policy loans without being subject to taxation. However, if tax-free loans are taken and the policy lapses, a taxable event may occur. Withdrawals (partial surrenders) and loans from life insurance policies classified as modified endowment contracts may be subject to tax at the time the withdrawal or loan is taken and, if taken prior to age 59½, a 10% federal tax penalty may apply. Withdrawals and loans reduce the death benefit and cash surrender value. Always consult with a tax advisor regarding your particular situation.
Products are issued by and guarantees based on the claims-paying ability of the AuguStar Life Insurance Company and AuguStar Life Assurance Corporation. Product, product features and rider availability vary by state. Issuer not licensed to conduct business in NY.
