Estate Planning

Under current estate planning law, everybody has a $5.25 million dollar exclusion for either gifting or estate tax exclusion. If you do not use it, it automatically transfers to the surviving spouse. Life insurance can be used to cover the estate tax liability above this amount. For married couples, quite often, a second to die policy would be the ideal option.

For those who do not have the estate tax concern, quite often funds are needed for final expenses and there are specially designed policies that can fill this need. It is important to note, that all life insurance proceeds arrive income tax free to the beneficiary.

When insuring for business succession planning, once again life insurance is very appropriate. If the partners of a company insure each other, there is a ready source of funds to fund a buy/sell agreement. Once again, if done correctly, the funds would arrive to the beneficiary on an income tax free basis and depending on the structure of the actual buy/sell the cost basis of the surviving partner can be increased with the purchase cost.

For deferred compensation arrangements with executives, life insurance via the loan features of a policy can be used to have a customized stream of deferred income for the retiring executive. Once again, it is important to note, that this stream of income can be designed in such a way that it would enter the business on a tax free basis and be paid out on a tax deductible basis to the business.

When folks are interested in charitable giving, quite often highly appreciated assets are gifted to a trust and a tax deduction can be obtained by the person making the gift. Life insurance can then be acquired to replace the value, that was gifted, for the beneficiaries. Quite often this occurs when there is highly appreciated real estate and on occasion, I have dealt with a highly appreciated art collection.

Non working spouse – ok

Universal Life

Universal Life comes in a variety of shapes and sizes. It can function like long-term term insurance. I can offer a guaranteed Death Benefit for a guaranteed premium for whatever period of time the client selects. It is the type of life insurance most often used for long term needs if cash value is not desired. One reason is because it has the lowest long-term cost of any permanent policy. Universal Life can be for both individuals and also second to die.

On the other hand, if cash value is desired, index universal life is ideal. The interest rate for the policy, reflects the returns on the S&P 500. With specially designed policies, the internal cost of insurance can almost be eliminated allowing for maximum cash value growth on a tax deferred basis. And, when desired, a stream of income can come out of the policy on a income tax free basis. A great retirement vehicle.

Whole Life Insurance

Whole Life is a great way to accumulate cash value for the long term. Whole life is dividend based and the returns of dividends have outperformed any policy based on a current interest rate. Another great feature of whole life is that the premium can be vanished relatively soon due to the higher return from the dividends.

Term Life Insurance

Term life insurance provides coverage at a fixed rate of payments for a limited period of time, the relevant term. After that period expires, coverage at the previous rate of premiums is no longer guaranteed and the client must either forgo coverage or potentially obtain further coverage with different payments or conditions. If the life insured dies during the term, the death benefit will be paid to the beneficiary. Term insurance is the least expensive way to purchase a substantial death benefit on a coverage amount per premium dollar basis over a specific period of time.

Long Term Care

I meet a lot of people who have experienced their parents being in a long term care facility and the costs involved. Many people acquire a long term care insurance policy to cover the need, but quite often the benefits are never used. Now there are specially designed life insurance policies with long term care benefits. One of my favorites would provide a benefit of 2% of the face amount towards long term care for a period of 50 months. This policy would also have an insurance benefit should death occur prior to needing the long term care benefits.

What is a Medicare Supplement Plan?

Also known as MedSup or Medigap, their function is to fill in the gaps (copays and deductibles) of Medicare. The various plans are identified by letters A through N.

Our company will be happy to provide you a spreadsheet identifying the benefits and premiums from all of the companies that offer coverage in your state.

To obtain pricing, please call Ed Rivas, (609) 304-8260