Wednesday, 23 January 2019
BREAKING NEWS

Retirement: Life insurance under the new tax law

It’s always a good idea to regularly review your life insurance policies to make sure they still meet your needs. But changes in tax law provide extra incentive to reassess your policies’ costs and benefits.

The new tax law roughly doubled the federal estate-tax exemption, to $11.18 million in 2018. So people who purchased policies to help cover any estate tax that might be due are no longer subject to it. The new law also created more favorable tax treatment for people who sell their policies to investors.

That doesn’t mean you should rush to dump your policy. Some state estate-tax exemptions remain relatively low, and the federal exemption is scheduled to revert to $5 million, adjusted for inflation, in 2026. And even if your policy no longer fits its original purpose, life insurance may offer other benefits — such as creditor protection — that are important to you. You may also be able to modify the policy to make it more attractive as an investment vehicle or exchange it for another policy better suited to your goals.

The bottom line: Policyholders should keep close tabs on their insurance and weigh all their options before surrendering or selling the policy.

Source: http://www.chicagotribune.com/business/sns-201809201207–tms–kplngmpctnkm-a20181010-20181010-story.html

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