Life Insurance

Life insurance¹ is a unique property. It can create an estate with low premiums in comparison to the total death benefit. It also has many tax advantages and may be an ideal product for your financial plan. Uses include:

• Providing liquidity to pay death taxes and estate costs, thus avoiding the necessity of liquidating valuable assets to pay these expenses. Note that federal estate taxes are due only nine months after death.
• Providing funds to pay off a mortgage at death.
• Providing spouse insurance. In making an insurance need analysis, we often forget or underestimate the dollar value of work done in the home by both husband and wife.
• Providing funds for college education. Either at death, or, during life, policy cash values can help pay college costs.²
• Guaranteeing³ funds to repay loans or other debts owed by the decedent. Life insurance proceeds provide cash to pay estate obligations and help provide the survivors with a debt-free start.
• Supplementing retirement income needs. The policy cash values can be used to supplement pensions, Social Security and other retirement income.
• Providing funds for an orderly transfer of a business interest at death. Business owners may have an agreement to buy the interest owned by a decedent but lack the cash to pay for the decedent's share of the business.
• Providing funds for a business at the death of a key employee. Insurance proceeds can be used to recruit, hire and train a replacement. The proceeds also can provide working capital to help offset financial losses due to the loss of the key person's services.
• Providing funds for charitable giving. Life insurance death benefits payable to an organized charity can help provide funds for the charity's work and may provide tax benefits as well.
• Helping equalize inheritances. For example, a decedent could leave a business interest to the children who are active in the business and provide benefits of equal value to other children through insurance proceeds.

1 Note: Life insurance policies and contracts contain exclusions, limitations, reductions of benefits and terms for keeping them in force. Your licensed financial professional can provide you with the cost and complete details. Availability varies by insurance carrier and by state.

2 Life insurance policy cash values are accessed through withdrawals and/or policy loans. Loans are generally not taxable. Withdrawals may be taxable under some circumstances. Unpaid loans and/or withdrawals will cause a reduction in the policy cash values and death benefits. Please consult with your tax advisor for advice regarding your particular situation.

3 Guarantees are backed by the claims paying ability of the insurance company.