Page 47 - MetalForming June 2011

Blackman on Taxes
The numbers look even better when Joe is married and the insurance involved is second-to-die.
Conservative Investors Life Insurance (CILI)
Want to increase your income, legally avoid the income tax on that income, and have your capital (plus all earnings) go to your family tax-free? No, it’s not a fantasy. It’s CILI, perfect for Joe, married to Mary (also age 70).
Joe and Mary buy a $3 million second-to-die CILI policy with an annual premium of $70,548. The policy earns 3 per- cent. The payoff on their investment comes after the second death and is determined as follows. (This example assumes that after 10 years—at age 80—Joe and Mary get hit by the same bus.) Their heirs would receive:
Of course, the longer that Joe or Mary lives, the larger the amount to their heirs.
The easy way to summarize a CILI investment: You get your investment (premiums paid) back, dollar-for-dollar; plus earnings (3 percent here) on premiums paid; plus a guaran- teed bonus, the death benefit (here $3 million); and, it’s all tax free (no income tax, no estate tax).
Important note: The exact numbers for any specific per- son in each of the above examples are influenced primarily by age, healt, and interest rates.
Readers of this column can receive all the information needed to evaluate the above options. Just fax your name and birthday (same for your spouse if you’re married), address and phone numbers to Irv Blackman; 847/674-5299. Mark “Code article” at the top of the page. MF
  

Precision Metalforming Association has made it easier than ever for you to...
Death benefit
$3,000,000
Premiums paid ($70,548 times 10 years)
$705,480
Interest earned on premiums paid (at 3 percent, but would be higher if interest rates rise, or lower if interest rates fall)
$111,999
Total amount (tax free) to heirs
$3,817,479
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