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CAPIS - Is Your Life Insurance Still Doing Its Job?
June, 2005
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Did you know that life insurance death benefits can be paid to your heirs free and clear of income taxes? That is only if it is set up properly. In most cases, a death benefit payable to a named beneficiary (not your estate) is not subject to ordinary income or capital gains taxes. It can also be excluded from your estate under certain circumstances and policy cash values can be accessed by the owner on a very favorable tax basis.
These unique tax advantages make life insurance a very potent financial tool in financial planning and wealth transfer. The catch is that these tax treatments are derived from how the contract is set up. For example, if a trust owns the contract, then policy benefits payable to your heirs are exempt from both income and estate taxes, but access to the cash value is no longer available to you. On the other hand, if you own the contract, you enjoy tax-advantaged access to the policy's cash values, but the death benefit will be subject to estate taxation.
If you bought your life insurance more than five years ago and it has not been updated, chances are some changes to the policy may be necessary. A simple review can examine your policy in relation to your current plans to make sure that your coverage objectives are still being met and your contracts continue to deliver the benefits for which they were purchased.
To initiate your insurance check up, just complete the CAPIS Life Insurance Policy Review Request and fax it back to CAPIS at (213) 473-8780.
This review is a straight-forward fact-finding mission. The process will evaluate coverage with respect to ownership, beneficiary designation, contract form, coverage amount, duration and cost to assure that your life insurance policy continues to be a valuable underpinning of your current financial plan.
CAP Affiliated Physicians Insurance Services (CAPIS) is a life and health insurance agency owned and operated by the Cooperative of American Physicians, Inc. CAPIS Personal Insurance Services are only available to CAP Members physicians, their employees and families. Tax advice should only be obtained from your personal tax advisor.
We invite you to PRINT THIS PAGE, fill out the form below, and FAX Info to:
CAPIS (213) 473-8780
or, use our PRINTER FRIENDLY version HERE
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CAPIS Life Insurance Policy Review Request Form
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