Tax saving planning

Having a large life insurance policy in the U.S. is one of the easiest and pragmatic ways to plan for taxes. According to the U.S. financial advisory website Spendmenot, more than 57% Americans have life insurance. According to financial information released by the White House, President Joe Biden's family holds multiple life insurance policies with cash value.

• In the U.S., you can see the use of life insurance for tax planning, asset inheritance, risk segregation, investment management and family protection, whether you are a financial magnate, a dignitary or a financial expert. So, why do Americans love to invest with life insurance? Putting aside the attributes of American life insurance such as cost effectiveness, cheap premiums, high leverage, comprehensive features, strong protection, and solid returns. One of the most critical factors is that U.S. law gives U.S. life insurance many tax incentives. U.S. Code 803, 101, 7702 and other regulations explicitly provide that life insurance claims are exempt from income tax and the earnings within the policy are exempt from capital gains tax. Investment insurance proceeds are exempt from capital gains tax, and death benefits are not subject to income tax when inherited by the beneficiary. For life policies that are highly leveraged and can accumulate large amounts of cash value with compound interest, the money is "taken" from the policy in the form of a low-interest loan, and the money is treated as a tax-free cash flow and is not subject to income tax.
  
• U.S. law also provides that the cash value of life insurance is not subject to lawsuit recovery and enjoys judicial immunity. Therefore, through proper planning, it is possible, in a sense, to hedge political, marital, and debt risks. If the amount of assets is large enough, it can also be used in conjunction with a trust, thus achieving asset protection, risk segregation, and fully reducing and resolving tax and other risks. These are the special attributes that the law gives to life insurance in the United States. In the U.S., it is not difficult to find investment products with high returns, such as investment in real estate, investment in the stock market, etc., but there are not many products that can be used for legal and compliant tax planning and enjoy large tax incentives. For many cross-border people and immigrant families, in addition to houses and cars, U.S. life insurance is an "immediate need". Whether it is for retirement and medical care, tax planning, asset inheritance, risk segregation, etc., life insurance can play a vital role in each area.