“Whole Life Insurance … Love It or Leave It?”

Whole Life Insurance … Love It or Leave It?,” by Michael Aloi, Kiplinger


“In the case of my 60-year old retiree, the policy required five more payments. We concluded his old whole life policy was not going to meet his needs going forward. Instead, we did a partial 1035 tax-free exchange of his old whole life cash value into a fully paid-up long-term care insurance policy. A 1035 exchange allows taxpayers to avoid paying income tax on the gains of whole life cash value if you exchange it for another life insurance, long-term care or annuity policy. The new long-term care insurance policy has a death benefit, but more importantly for my client, it provides a pool of money to cover long-term care expenses for up to six years. This will help him maintain his other IRA and bank accounts for retirement income.”


LTC Comment (from Stephen A. Moses, President, Center for Long-Term Care Reform):