Life Insurance Tax Advantages Repealed if Trump Wins

[BNTRS]

This idea gets drummed up every few years and for obvious reasons nothing happens. If they did decide to tax life insurance CV it would be a slippery slope for many different reasons.

First, Withdrawals over basis are already subject to taxes. They could possibly make it LIFO instead of FIFO. But that would not be a big deal since Withdrawals are rarely the best way to access CV.

Second. If they taxed the Loans then they would open up the possibility of making all types of Loans a taxable event. Especially HELOCS.

Third. If they taxed the CV build up as Capitol Gains like they do CDs. Then owning LI would become a taxable event and would discourage ownership in a massive way. The government does not want this because LI keeps beneficiaries from being on the gov dime. This would also likely cause the industry to have to massively redesign policies which wold cost hundreds of millions of dollars and would be fought with a massive lobbying effort.

Fourth. Even if they did tax the CV it would be a drop in the bucket to fix our national debt. Much bigger fish to fry.

Fifth the likely reduction in new premium collected creates a substantial loss in state premium tax revenues.

 

[Justin Bilyj]

Fifth the likely reduction in new premium collected creates a substantial loss in state premium tax revenues.

that's not for all states is it? Only those that have premium taxation laws?

 

[pcbinsurance]

You didn't respond quick enough. I gave a guy 50-1 odds already.

 

[Robert Barney]

You didn't respond quick enough. I gave a guy 50-1 odds already.

Bad luck for you. You could have negotiated 40 to 1 with me.

So much for "he doesn't have a chance".