Help Make Legacy Building a Winning Strategy for You
Legacy building is a strategy using permanent life insurance to offer death benefit protection along with an efficient way to pass along assets to beneficiaries. Typically, the strategy starts with funds the client already plans to pass along to family. These funds are transferred to a life insurance policy, which may immediately increase the amount in the form of the death benefit.
Items discussed below include:
People who can benefit most from legacy building are usually within retirement age and have assets set aside for heirs, charity, or to help pay educational costs for grandchildren.
Here are common traits for clients seeking a legacy building strategy using life insurance.
Is within the retirement ages of 55-75 and has a retirement plan in place
Needs death benefit protection or currently holds an underperforming life insurance policy
Holds funds designated to leave to heirs or children in CDs, savings accounts, or money market accounts, especially those designated as “payable/transfer on death” or POD/TOD
Has titled assets jointly with heirs
Has annuities coming out of surrender
Currently takes RMDs, but doesn’t have a current need for the funds
Consider a death benefit guarantee product: The death benefit guarantee offers assurance the benefit will be available.
Accelerated Death benefits: Available to help with living needs should conditions be met.
Look to maximize the death benefit that fits your clients' needs: Help your clients purchase the largest amount of death benefit for their needs that an asset transfer can provide.
Sample Case 1: Custom Guarantee®
This universal life insurance product offers a competitively priced guaranteed death benefit. For many clients, the guaranteed death benefit provides assurance the death benefit will be available for beneficiaries. Consider Susie, a 68-year-old woman who is classified as preferred non-tobacco. She has $75,000 designated for her two children when she dies. With a one-time dump-in of $75,000, she gains a death benefit of $217,241, which is a significant jump in funds for her children! Consider the Custom Guarantee for your next legacy building case.
This indexed universal life (IUL) insurance product may be ideal for legacy building scenarios. The policy offers a guaranteed death benefit,2 and the IUL design may generate significant cash value. Paul, age 70, is in good health and is classified as standard non-tobacco. He has prepared well for retirement and has set aside $100,000 in a certificate of deposit that he plans to split up equally among his three children. While he is interested in leaving this money to his kids, he also would like to retain access to the money for those "what if" scenarios. With the dump-in, he immediately gains a death benefit of $193,646 guaranteed to age 100 and maintains access to potential accumulated cash values.
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