An LTC policy too, no?White Coat Investor did a good job of explaining your options with the policy. One clarification - if you were to exchange, you could go into either another life insurance policy or an annuity.
If you were to fully surrender, you would have taxable ordinary income reported to you of the excess of the sirrenser value over the basis (likely, the cumulative premiums paid). You could partially surrender now and fully surrender later to spread the taxable income over multiple tax years.
And a partial surrender up to basis could be a GREAT way to reduce the size of the policy if you want. The coolest tax benefit of permanent insurance is that your "principal" (basis) comes out first, unlike annuities when it comes out last or regular investments when it comes out mostly pro-rated.
Statistics: Posted by White Coat Investor — Thu Dec 26, 2024 2:08 pm — Replies 4 — Views 223