Death and Taxes

Posted on 12 August 2011

If there is anything in life on which you can make a sure bet, it’s death and taxes.  Yes, the age-old axiom still holds true.  The chances of winning the lottery or a huge haul via a Publishers Clearing House sweepstakes are rare.  But the sure bet of life insurance will indeed pay off!

Insurance companies use actuarial tables, basing their statistics of paying out policies upon life expectancy of the insured parties.  Therefore, they sell insurance to people that have the longest life expectancies.  Newborns are not insurable due to their high death rate, while younger people in good health are welcomed with open arms.

Insurance companies are not the only ones hot to take your money; they have friends. Some of those friends are financial planners.  Financial planners always urge their clients to assume a hefty life insurance policy in order to protect the clients’ families in case the breadwinner (policy holder) should die.

Think about the money that you gamble away on lottery tickets, and consider investing that money in a life insurance policy instead.  In time, the policy will pay out to the beneficiary the amount for which you are insured.  By the grace of God or some legal loophole, Uncle Sam cannot touch this payout.  But, if by chance you hit the lottery, Uncle Sam and his good buddy, the IRS (Income Removal Service), will be at your door with their hands out.

Think of a life insurance policy as forced savings for a rainy day.  Just like a savings account, you can borrow against your policy, provided you continue to make your payments (premiums).  You’ll receive a low interest rate against the loan, because you are borrowing your own, non-taxable money.  The only problem is, you have to die to be a winner.  But, your beneficiary will smile all the way to the bank!

On the opposite side of the coin, taxes are a financial drain on your income, not to mention, your psyche.  You need a man like our Secretary of the Treasury, Tim Geithner, to fill out your tax-exemption forms. Hopefully, he’ll use Turbo-Tax as a back up on which to lay blame (computer errors!), in case you get caught overstating your exemptions.  You’ll want to avoid that nasty interest and those hefty penalties, of course, which the tax collectors will exact like a pound or more of flesh.

From the beginning of time, tax collectors were looked upon with disdain.  Remember the Biblical story of Jesus and the tax collector?  In modern times, there’s been little evolution with respect to tax collectors, except for the fact that now, instead of taxpayers hating one individual, we hate an entire governmental agency: the aforementioned IRS.

Our national motto, “The Land of the Free and the Home of the Brave” has been tarnished by taxes.  Once upon a time, a man’s home was his castle.  In the real world, however, no man and no woman owns his or her home if he or she does not pay the required taxes.  So powerful a thing are taxes that they remain attached to your property even after you quit this Earth!

There is a saying that goes, “You come into this world with nothing and you will leave this world with nothing.”  Long before you meet your Maker, however, there’s a very good chance that whatever you did own will be eaten up in ever-escalating taxes.  Maybe life insurance is the answer … or perhaps, the best revenge! 

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