Whole Life Insurance Dividends: How To Get Tax Free Income


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The 19 Sources of Retirement Income: Whole Life Insurance Dividends

Welcome to the Wealth under Pressure Podcast, in which John Smallwood, a certified financial planner, identifies key areas of pressure on your wealth and strategizes with you to reduce it.

In this episode, John continues his series the 19 Sources of Retirement Income, focusing on Whole Life Insurance. He describes the ways in which Whole Life differs from other types of life insurance and highlights how you can use the dividends paid to you by your insurance company to create a tax-free income stream.

John is the author of 5 Ways Your Wealth is Under Attack. He has lectured extensively on financial planning and has received the Five StarSM Wealth Manager Award 6 years in a row.

John’s strength lies in his ability and commitment to continually improve the level and quality of the financial planning process. His dedication to his clients’ growth involves an evolving strategy that strives to meet the demands, desires, and needs of his clients in a continually changing economic environment.

Don’t miss John’s key points:

  • A whole life policy insures your most important asset—you—and your ability to earn money, spend money, and save money.
  • A whole life policy has a guaranteed cash value, guaranteed premiums, and a guaranteed death benefit.
  • The assurance that your heirs will receive a death benefit gives you flexibility with your other retirement income sources.
  • Many whole life policies will pay policyholders a dividend when the insurance company is profitable.
  • These dividends are subject to one of the best tax benefits available: They are not taxed until they reach your basis—the amount you have paid as premiums, less any other withdrawals you have already taken.
  • Your dividends offer you a lot of flexibility—they can be used as a source of income, kept in the company to earn interest income (although that is taxable), or to buy additional insurance with additional cash value, additional dividends, and an additional death benefit for your heirs.
  • Whole life insurance offers security because insurance companies will always see an increase in value, regardless of what happens with interest rates. Their balance sheet is going to go up every single year—offering you a sure source of tax-advantaged dividend income.

For more, listen here. Then visit us at smallwoodassociates.com and click the “let’s get started” button, connect with us on social media, or call us at (800) 797-1000. Set up a free, no-obligation phone call. We’ll help you set up your plan to accumulate as many of the 19 Sources of Retirement Income as possible. Whole life insurance can be one of the pillars of your retirement plan.

Talk to a Smallwood Wealth Management Financial Advisor

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