If you want to accomplish one or more of the following:
- Reduce current taxes on investment income
- Retain complete control of assets
- Lower current taxable income
By depositing funds into a universal life policy on a tax-deferred basis, you do not pay income tax on investment growth within the plan until funds are withdrawn. Income earned within the plan is not reported on your annual income tax return.
You will appreciate the fact that the growth of the cash within the plan can provide an income at retirement through a series of withdrawals. The plan can also be used as a collateral for a bank loan (interest paid may be deductible if the loan is used for investment purposes).*
Current tax legislation allows you to transfer ownership of a policy on a child or grandchild to the child or grandchild during your lifetime, without having to pay tax on the tax-deferred accumulation at the time of the transfer.
