When properly structured, life insurance can provide tax-deferred growth, tax-free cash flow, and a tax-free death benefit. The tax-preferential treatment provided to life insurance allows an individual to have greater flexibility over which dollars to use during retirement, and depending on the type of life insurance, it can also provide a non-correlated asset to the portfolio providing additional diversification. With tax rates constantly changing, life insurance can also function as a hedge against future tax rate hikes. The tax-preferential treatment of life insurance can be especially advantageous for individuals in a higher income tax bracket or as a hedge against a rising tax environment. Tapping into cash value income tax free can be a great way to supplement a retirement income plan and, at the same time, help manage taxe
