is it true investing in insurance companies is tax free?

Answer #1

Nothing is tax free except from donations. If you invest in an insurance company, you will receive dividends from the profit the insurance company makes, which means “income” and you get taxed on the money you received…I’m not sure about other people, but if I had money to invest in a company, I would want receive a nice juicy quarterly or yearly dividends.

Answer #2

In the US municipal bonds are tax-free investments. Mutual funds that invest in these bonds are also tax-free.

Answer #3

I wonder if you are talking about single premium life insurance.

With single premium life insurance you make a one time deposit and it takes immediate effect and you do not need to pay more money to maintain life insurance coverage. Life insurance policy benefits are not taxed as income or as inheritance. You can borrow against the cash value of your policy without paying tax and often these policies have provisions that if you have a terminal illness you can receive a benefit before you die and of course when you do pass away your heirs as beneficiaries can receive life insurance benefits without taxes where they probably would have to pay taxes otherwise.

Answer #4

I read something about life insurance, but didn’t understand it at first. But what i heard is by investing in insurance companies (not too long ago. hopefully still now.) people could take advantage of lower corporate tax rates and avoid accumulated earnings tax. It said insurance companies were one of the few business operations that are exempt from this tax.

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