Here's a birthday gift a centenarian might not see coming: a tax bill from the IRS. Certain life insurance policies give you access to 'cash value' that grows tax-free. The catch: You might owe taxes when you turn 100.
Many policies that were issued before 2004 mature at 100, said Michael Lovendusky, vice president and associate general counsel of the American Council of Life Insurers.
"At the time when these tables were established, it was something that the industry didn't think about," said Love.Globally, there were close to half a million individuals over age 100 in 2015, according to theTo contend with the growing number of centenarians, in 2004adopted an updated mortality table that has pushed out the maturity date of new policies to age 121.
This means you can keep your coverage intact well beyond your 100th birthday if you have one of these newer policies.If you're in your 60s or 70s, it just might be time to talk to your financial advisor about what might happen as your 100If you're young and insurable enough, ask your advisor whether it would make sense to switch to a new contract with a maturity date of 121.
"The sooner you address it the more viable options you will have," said Love. "The longer you wait, you might not be able to get a different policy if you're too old."
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