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Is it possible for supplemental life insurance to be paid with pre-tax income? I am considering getting supplemental life insurance to supplement my existing life insurance policy. Can I use pre-tax income to pay for this additional coverage?
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Yes, supplemental life insurance can be paid with pre-tax income. This is often referred to as 'group term life insurance' when it is offered through an employer as part of a benefits package. The premiums for group term life insurance are typically deducted from your paycheck on a pre-tax basis, which can result in significant tax savings. However, it's important to note that the death benefit from group term life insurance is generally paid out as tax-free income to the beneficiary. If you are purchasing supplemental life insurance outside of an employer-sponsored plan, you may need to pay the premiums with after-tax income, depending on the specific policy and provider. It's always a good idea to consult with a financial advisor or insurance professional to understand the tax implications and options available to you.
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