Insurance policies often are a combination of a savings program and life insurance. The individual pays the

Question:

Insurance policies often are a combination of a savings program and life insurance. The individual pays the company, say, $1000 a year; $100 of that goes to cover the risk of his or her dying during the year, and the remainder goes into a savings program. The return on the amount in the savings program accumulates free of tax- just like an IRA. Explain how insurance can be used as a tax avoidance device.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Economics Of The Public Sector

ISBN: 9780393925227

4th Edition

Authors: Joseph E. Stiglitz, Jay K. Rosengard

Question Posted: