There is a little known tax code that allows individuals and businesses to over fund life insurance contracts and take the excess money after fee’s and expenses and invest those assets in the S&P index w/o dividends or mutual funds. More importantly IR-code 7702 allows you to tax defer those gains indefinitely!
Case in point, $100,000 invested at 8% over 30 years delivers $478,931 in a taxable investment but in a tax deferred investment delivers $1,006,266. Do you want $478,931 or $1,006,266?
The secret is Internal Revenue Code 7702. Think about it, never having to pay tax on interest, dividends or capital gains ever again. You should be asking the hard question now, How do I get my money out without paying taxes at withdrawal?”
The answer is simple, “It’s your money inside the life insurance contract so you can just borrow it out at a net-zero cost.”
Just look at this illustration example from Chapter 19 in “The Secret Asset” for my brother Michael age 31:
Life Insurance Retirement Strategy Using
Indexed Universal Life Insurance
(Michael, Age 31)
Annual Premiums: $50,000
Scheduled Years to Pay: 20
Total Premium Paid: $1,000,000
Annual Distributions Age 66-80: $432,900
Scheduled Years of Distributions: 15
Total Distributions: $6,493,500
My brother puts in $1 million over twenty years and then he can withdraw $6,493,500 million tax free over fifteen years based on our example. That’s a 6.4-to-1 tax-free return on his investment capital and all the time his life insurance is still in place.