SPOTLIGHT ON THE UNA: Income taxes and insurance (12/31/78)

SPOTLIGHT ON THE UNA

Income taxes and insurance

It has often been stated that, in view of the present national high tax policy, the only way an individual can accumulate and leave a sizable estate is by carrying adequate life insurance.

Life insurance proceeds received upon the death of the insured, under endowment contracts, term contracts and accident and health insurance contracts, are generally tax-free. The gain on the policy (the difference between what the insured paid in, less dividends and the total proceeds received) can be quite substantial depending on how long premiums were being paid before death occurred. Inasmuch as this gain will go untaxed, the saving to the beneficiaries can be considerable.

Such lump-sum benefits payable on the death of an insured are tax-free even if the beneficiary elects to receive installment payments spread over the life of the beneficiary. Part of such monthly or yearly installments, attributable to the prorata return of the lump-sum benefit, is not reportable as income. In addition, if the beneficiary is the spouse of the deceased, then the first $1,000 of the interest received annually as part of the monthly or annual installment is also tax-free.

Another tax advantage of insurance is that dividends paid by an insurance company, whether received in cash or accumulated by the insurance company, are not taxable income. At most, such dividends are treated as a reduction of the cost basis of your policy. Insurance may also provide a tax-free accumulation of cash. During the time that you pay premiums, the value of your insurance policy increases at compound interest rates. This increase is not subject to income taxes.

The Ukrainian National Association has a line of policies conducive to building a large estate. Our P-20 policy requires payment of premiums for 20 years and the amount of the policy is paid on death of the insured at any time after the first premium is paid.

Our P-65 policy requires payment of premiums to age 65. The amount of the policy is paid on death of the insured before or after he reaches the age of 65 (after the first premium is received).

The most reasonable policy that the Ukrainian National Association has for the purpose of increasing your estate is our DP-65 policy. This policy calls for payment of premiums during the insured's entire life and the payment of the death benefit for the entire amount of the policy if death occurs before age 65. If death occurs after age 65, then 50 percent of the inured amount is paid to the beneficiaries.

Let us now compare the cost of these three different policies, assuming that you are 30 years old and that you are purchasing a $20,000 policy:

Annual cost of P-20 policy, $571.40
Annual cost of P-65 policy, $424.80
Annual cost of DP-65 policy, $294.80

The DP-65 policy offers the most insurance for the least amount of money, especially during the insured's younger years when the insured is earning less but is most in need of insurance protection for a growing family.

Look no further. The Ukrainian National Association offers the lowest premiums obtainable anywhere for comparable insurance policies. In addition to our large dividends paid annually, the above-listed insurance policies quickly accumulate cash surrender reserves on which you can borrow at 4 percent or which you can cash in whenever you are in need of funds.

As a member of the Ukrainian National Association you will not just be a policy holder, you will be part owner of the organization which is composed of 87,000 members and has $43 million in assets. You can enjoy vacations in a Ukrainian atmosphere (at a discount) at our all-year-round resort Soyuzivka, in Kerhonkson, N.Y. You will also receive our daily newspaper, Svoboda, which is printed in the Ukrainian language, and The Ukrainian Weekly, which is printed in the English language. Keep in touch with Ukrainian affairs. Be proud with us of our 85 years of service and accomplishments on behalf of our Ukrainian communities. You as a member of the Ukrainian National Association, have an equal right to participate in branch meetings, to vote on all matters concerning branch activities and to represent your branch as a delegate at our conventions and to hold office in your branch and in the Supreme Assembly, our governing body composed of 26 elected officials. These are privileges that are not available in commercial life insurance companies.

Become one of us! Join the Ukrainian National Association now!

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