Not exact matches
This is more
of a philosophical question, although I'll point
out that life insurance
cash values can be used with financial
leverage the purchase higher risk / return ventures.
With a number
of ways to use the money that builds up in the
cash value account, such as taking
out a life insurance loan or paying insurance premiums, the flexibility these policies offer make them attractive to individuals looking to build up savings while at the same time securing insurance coverage providing
leverage in the form
of a death benefit payout.
Interest incurred on indebtedness has historically been deductible, (although the deduction
of «personal» interest was largely eliminated in 1986), and in the 1950s a type
of «
leveraged insurance» transaction began being marketed that permitted an insurance owner to in effect deduct the cost
of paying for insurance by (1) paying large premiums to create
cash values, (2) «borrowing» against the
cash value to in effect strip
out the large premiums, and (3) paying deductible «interest» back to the insurer, which was in turn credited to the policy's
cash value as tax - deferred earnings on the policy that could fund the insurer's legitimate charges against policy
value for cost
of insurance, etc..
With a number
of ways to use the money that builds up in the
cash value account, such as taking
out a life insurance loan or paying insurance premiums, the flexibility these policies offer make them attractive to individuals looking to build up savings while at the same time securing insurance coverage providing
leverage in the form
of a death benefit payout.
This is more
of a philosophical question, although I'll point
out that life insurance
cash values can be used with financial
leverage the purchase higher risk / return ventures.