10 Reasons to own Life Insurance
- Create an Estate – Life Insurance is the only product that provides a benefit at the exact time your family will need it. Where time and other circumstances may keep you from accumulationg sufficient assets to care for your loved ones, a tax-free death benefit at the time of death will create an instant estate for your family.
- Pay off a Mortgage – Perhaps the most common useage of life insurance, most people would like to pass the family residence to their spouse or children free of any mortgage. A policy can be designed to do just that.
- Pay off loans – Personal or business loans can be paid off with a well designed Life insurance policy.
- Pay estate taxes and settlement costs – Estate taxes can be as high as 50% of your estate depending on the value of your estate. This is the highest tax in the USA. Life insurqnce is a key tool in efficiently transferring wealth to the next generation.
- Funding a business transfer – Buy-sell agreements between partners are often designed to transfer a business at death. The best funding vehicle for this type of agreement is life insurtnce.
- Supplement retirement funds – Current insurance products provide a tax deferred cash accumulation, and access to cash values on a tax free basis. This type of life insurance can be designed to provide extra income at retirement
- Protect a business from the loss of a key employee – Also known as “Key Man Insurnace” this type of coverage is vital to the long term growth of most businesses. Key employees are difficult to attract and retain. An untimely death can cause severe financial strain on the business.
- Equalize inheritance – When the family business passes to children, insurance is often used to also provide a benefit to the children who are not in the business.
- Replace a charitable gift – Gifts of appreciated assets can provide estate tax and income tax benefits but require giving up ownership of the asset. Life insurance is often used to replace the value of the donated asset
- College Fund for children – Life insurance on a minor can generate significant cash values which can then be accessed tax-free to help fund for college
