Life Insurance for High Income Professionals
The standard term life insurance quote may be perfect for many people, but it may not be just right for some professionals and business owners. According to the article on Fox Business by Timothy R. Fussell, indexed universal life insurance policies could be the perfect option for today's professionals and business owners to fulfill their retirement needs.
Fussell sites the indexed universal life insurance policy perfect for professions such as doctors, attorneys or CPAs. As a professional, they often operate as a P.A. and are taxed as a sole proprietor, an S corporation or a C corporation. Under these specific tax codes, these professionals are limited to retirement account choices. The maximum contribution limit is $49,000 according to the article, and many professionals find this limiting. With these restrictions, the indexed universal life (IUL) can be a better choice.
With sometimes very high incomes in the professional's household, they want ways to save more money without tax penalties. With the IUL, there is not limit as to how much money you can save and the money still grows tax-deferred with other advantages as well. Money is accessible in the case of business need, and can be accessed through interest-free loans. By retirement, the money is paid out in the form of tax-free loans against the value of the account.
This type of policy can be viewed as a lifetime income without risk of market volatility and in the case of your death, the face value of the life insurance policy would still be paid to beneficiaries as a tax-free death benefit. Be sure you choose a financial adviser that specializes in clients with large incomes so they have a working knowledge of tax implications and saving caps. It will be worth your time to find someone with an expert opinion on the matter.