To generate a tax-free income stream from cash value life insurance a few major caveats need to be in place. First any cash value policy needs to be designed as a non-modified endowment contract compliant with the TAMRA regulations or Cash Value Accumulation Test. Secondly, the policy must remain in force for the life of the policy insured. There are four cash value life insurance policies. Each policy has a different crediting method and needs to be qualified for the policy owner for product suitability. So every prospective purchaser needs to undergo a risk tolerance test to discover which policy fits his or her profile and financial goals. Participating Whole Life is an interest rate crediting method. Each year the board of directors declares a dividend, a return of unused premium. Guarantees are published in the illustration proposals. These types of polices are for conservative investors with long time horizons. Universal Life is an interest rate crediting method which has been consistently low for a decade.  As a result it has fallen out of favor among financial professionals for its low crediting rate. These type of polices are for conservative investors with long time horizons. Indexed Universal Life is an   Read more…