The National Directory of Certified Public Accountants

Ask A CPA - Insurance

What Are The Tax Advantages Of Life Insurance ?

First of all, life insurance is generally not deductible as a business expense. However, life insurance can provide a tax-free accumulation of cash value. Most importantly, the proceeds paid upon the death of the one who is named on the life insurance policy, is tax-free to the beneficiaries, if the policy is not held within a pension plan. Life insurance is often used to provide liquidity for the payment of estate taxes or the buyout of a business interest upon the death of one partner. Meet with a CPA to discuss your situation in detail. There are many types of life insurance policies. A CPA can determine which type of policy is suitable for your needs.

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