Life Insurance - a lot more than security!
Traditionally (and in the minds of most people today), the sole purpose of life insurance is to help replace the loss of income due to the untimely death of a loved one. However, the life insurance industry has evolved significantly and it now offers sophisticated tools that are an integral part of financial planning and wealth transfer!
According to Life Insurance Marketing and Research Association (LIMRA), sales of individual life insurance policies jumped 11 percent in the first quarter of 2021, compared to the same period in 2020. That's the fastest growth since 1983. Despite the surge, there are roughly 102 million uninsured or underinsured Americans, according to LIMRA, amounting to 40 percent of the adult population. But now that seems to be changing, as more people realize the benefits of life insurance in broader financial planning.
We work alongside you!
Regardless of which life insurance strategy you choose, timing is of the essence! Due to age and any potential health issues you might encounter, securing life insurance at a younger age can make it much more affordable and even more impactful.
According to RBC Wealth Management, there are four ways to effectively utilize life insurance with financial planning.
- Understand your needs and tailor your policy accordingly. There are several options available when it comes to basic life insurance.
- Life beyond workplace insurance. Many individuals believe the basic coverage they receive through their workplace is sufficient. The median coverage for such policies is typically $20,000 or one year’s salary and the policy is tied to your employment. So if you leave your work or become unemployed, you will no longer have this policy.
- Tax Benefits. Perhaps the most undervalued aspect of life insurance is the fact that death benefit distributions are completely tax free! Compared to traditional 401(k), this represents an instant 20% saving on the distributions received by the beneficiaries. For high net-worth families, life insurance is absolutely a critical tool as it can help reduce or eliminate the tax burden for their heirs. If the value of an estate exceeds $11.7 million (current federal exemption level), the heirs could face costly estate taxes. In order to cover the tax burden associated with estate taxes and avoid liquidating assets, life insurance death benefit is a greatly effective and an absolute must have! This way, your heirs get to keep more of the hard-earned estate rather than worrying about paying uncle Sam!
- Legacy Giving. Life insurance can be a great way to leave a strong legacy behind for charities or causes that you are passionate about. There are many ways to do this:
- Policy beneficiary – simply name the charity or cause of your choice as a beneficiary and they will receive the death benefit.
- Charitable giving rider – the policy will pay a percentage of the value to a charity or cause of your choice.
- Policy donation – the charity or cause of your choice becomes the actual owner and they will eventually receive the death benefit or can surrender the policy
- Dividend giving – if your permanent policy pays dividend, you can direct those to a charity or cause of your choice.
Why Our Clients Love Us!
Listen First
We want to offer solutions that fit your needs, so we always start by listening to you!
Client Needs
We offer solutions that fits the needs of our clients by taking a fiduciary-based approach.
Experienced Team
Our team has decades of experience and we want to leverage that for the needs of our clients!
Peace of Mind
Our goal is to remove your stress associated with managing your finances - let us be the CFO of your life!
Ready To Talk
Contact Us today for a free consultation!
Let’s setup a time for us to connect to see how we can be of service to you!