What are the tax benefits of certain insurance policies?

Certain insurance policies, such as participating whole life or universal life insurance, offer notable tax benefits. The main advantage is the tax-deferred growth of the policy's cash value. This means that any investment gains within the policy are not taxable until they are withdrawn. Furthermore, policy withdrawals are typically considered nontaxable up to the amount of premiums paid. In addition, the death benefit received by beneficiaries is generally not subject to income tax. This can provide a tax-efficient way to pass on wealth to loved ones. It is important to note that tax laws may vary, and individuals should consult with a tax professional to understand the specific tax benefits applicable to their insurance policies.