Annuities
This IRS penalty may apply if annuity withdrawals are taken before age 59½, in addition to ordinary income tax.
What is the 10% early withdrawal penalty?
This type of life insurance provides lifetime coverage, fixed premiums, and guaranteed cash value growth.
What is Whole Life Insurance?
This type of life insurance lasts for a set number of years.
What is term life insurance?
This feature allows money to grow inside permanent policies.
What is cash value?
This clause can automatically increase the death benefit to keep pace with inflation or additional coverage.
What is the increasing or option B death benefit?
In a non-qualified fixed index annuity, this portion of a withdrawal is taxed as ordinary income first.
What is interest (gain)?
This feature of life insurance grows tax-deferred and can be borrowed against during the policyholder’s lifetime.
What is cash value?
This type of insurance combines life coverage with savings growth.
What is Cash Value life insurance?
This allows policyowners to borrow from their policy.
What is a policy loan?
This rider provides a guaranteed amount of coverage for a child, often convertible to permanent coverage later.
What is a child term rider?
This tax rule states that gains are distributed before principal when money is withdrawn from a non-qualified annuity.
What is LIFO (Last-In, First-Out)?
This optional benefit allows policyholders to receive a portion of the death benefit early if they experience a qualifying illness.
What are living benefits (or an accelerated death benefit rider)?
This permanent policy allows flexible premiums and death benefits.
What is universal life insurance?
This life insurance rider lets you access part of your death benefit early if you cannot perform basic daily activities like bathing, dressing, or eating.
What is a chronic illness living benefit?
Policy loans are generally non-taxable, but this event could trigger taxation.
What is a policy lapse with an outstanding loan?
This type of annuity is funded with pre-tax dollars and is fully taxable as ordinary income when distributed.
What is a qualified fixed index annuity (IRA or 401(k) annuity)?
This dividend option allows policyholders to use dividends to purchase additional coverage without medical underwriting.
What are paid-up additions?
This life policy can earn interest linked to a market index.
What is indexed universal life insurance (IUL)?
This lets you access benefits while still alive if sick or injured.
What are living benefits?
This strategy involves using policy cash value to fund premiums in a tax-advantaged way over multiple years.
What is premium financing or leveraged life insurance?
This tax advantage allows annuity earnings to grow without being taxed until money is withdrawn.
What is tax-deferred growth?
This is the document that outlines coverage, benefits, and rules.
What is a life insurance policy?
This expense is commonly covered by life insurance.
What are funeral costs? (FINAL EXPENSE)
This happens if loans are not repaid and the policy lapses.
What is a taxable event?
This advanced concept involves using policy cash value to create supplemental retirement income through tax-free distributions.
What is a life insurance retirement plan (LIRP)?