Strategy Overview
Wealth Transfer
When you wish to transfer your assets to your next generation there are very few products like Life Insurance that can pass wealth TAX-FREE. A very successful strategy would be to have a life policy either on yourself or perhaps on your children. The ability to pass wealth in a Tax-free manner is important, but what if you could also have those funds grow tax-free for the life of your children too? This is what Life Insurance can do.
A Fixed Index Life Insurance provides:
- Safe Growth - linked indirectly to the market with no fees nor market loss potential.
- Tax-Free Growth - The challenge of passing a ROTH IRA, are that the rules state the ROTH must be depleted within 10 years which can make the desire to continue growing funds tax-free difficult. But with a Life policy on the children, not only is the cost of insurance less expensive but the policy will transfer from you to them upon your death, or to a trust of your choice.
- Death Benefit - The death benefit is always a core part of a life policy which means the cash within the policy will be less then the death benefit and be tax-free to the beneficiary.
- Long-Term Care Benefits - The death benefit can help the insured pay for Long-Term Care, by accessing what is called an Accelerated death benefit. Borrowing against the death benefit tax-Free.
Having a policy on your your children who are over 18, will offer them the ability to receive Tax-Free assets and even provide a lifetime of tax-free income too. But if your under, 65, this may work on you too. There are different strategies for each. Such as Death Benefit for the kids if you pass, vs Lifetime-Income for your children with Long-Term Care benefits. Either way, you maintain control of your funds until your passing, unlike a ROTH IRA.
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COMPARISON OF LIFE POLICY ON YOURSELF (if under 65)
We explore the option of having a life policy owned by you either with or without PREMIUM FINANCING based upon qualifications of income, assets or the combination there of. Premium financing is a concept that may allow you to create a bigger income stream for you or higher assets for your beneficiary. For some clients a standard Life Policy works better than a Premium Financed plan. We run the numbers to find out the strategy that works best. Now let's compare how they might match up between the two. Often when you need funds is the main decision. (THIS IS FOR EDUCATIONAL PURPOSES ONLY) Vertical Divider
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COMPARISON OF LIFE POLICY ON YOUR CHILDREN (if over 18)
We explore the option of having a life policy owned by you and the insured being the child. You maintain access to your funds, while growing the account with a very low cost of insurance. You can use those funds tax-free or leave them to your child should you pass. They would then have an account that would not have to be eliminated within 10 years. They could decide when and if they want the tax-free income. They would have access to the living benefits to help cover for Long-Term Care, and how much to leave to the next generation. (THIS IS FOR EDUCATIONAL PURPOSES ONLY) |
These illustrations are for educational purposes only. Please refer to all insurance company illustrations for details you will need to make an informed decision. We provide these examples for you to better understand how the concept works.
