Tax Advantages For Whole Life Insurance Policies For Those With Payroll

[Bryan Hancock]

In a separate thread there was a discussion of using whole life insurance to shield income from taxation for business owners with a payroll. My understanding is that this technique is used so that the owner with payroll can avoid sharing a 401(k) policy with their employees. Presumably this is because the policy would be too lucrative for employees on the payroll.

Another purported benefit is that one can borrow from the cash value and that the event would not be taxable. I have read that the borrowed money does not have to be paid back either, which seems dubious to me.

Thoughts? Opinions?

Is this a good strategy to shield income for high income earners with payroll?