While tax-qualified retirement plans allow an individual to avoid taxes through retirement, heavy taxes are taken out after. A “tax-free” insurance based plan can maximize your investment over time by allowing taxes to be taken on the “seed” instead of the “crop”.
The “tax -free” life insurance savings plan discussed here requires the investor to put a small seed investment into a large life insurance policy and then take out loans against the policy during retirement to pay for basic needs. The investor can use the interest on loans such as these as a tax deduction, making the loans essentially tax-free.