Both life insurance and annuities have taxdeferral benefits. Annuities offer steady income, while life insurance protectsyour family in the event of your death. However, many believe the tax benefitsare outweighed by administration costs and penalties. If you are planning totake money from your life insurance policy then it might be wise to consider anannuity instead. Moreover, people who live in a high tax state might want toconsider an annuity to hold income-generating assets.
See Weighing the Tax Advantages of Life Insurance and Annuities Against Their Real Costs, Wealthstrategiesjournal.com, May 14, 2013.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.
