| Investment-rich policies targeted for negative income tax treatment under the Internal Revenue Code |
Fixed, or variable, depending on policy |
Cash value builds up quickly, when compared to other cash value policies |
Retains the following tax advantages: (1) Death benefit is income tax free, and (2) cash build-up is not subject to income tax, provided not withdrawn during life |
The gain on lifetime amounts removed from policy by loan or withdrawal is taxable, and if the owner is under age 591/2, is subject to an additional 10% on amount subject to income tax |
Buyers interested in tax-sheltered, investment-rich policy, who do not intend to make pre-death policy withdrawals; Wealthy owners who use such policies to transfer income estate tax free |