Thirty-seven uses for
life insurance
Besides the obvious reason, life insurance can
be an effective risk management tool. This can be critical for families and
businesses alike. With adequate resources, you could potentially build a
successful personal or business portfolio using both life and long term care
insurance.
Sometimes even life specialists forget the
many needs and objectives that the ownership of a life insurance policy might
address. Consider the recent downturn in the market. Suggestion #25 is a
reminder that when someone intends for appreciated assets to be a legacy for
children and grandchildren, life insurance can guarantee the gift
income–tax–free and in a period of market loss, it can make up for that loss.
Life Insurance has even been called the “new asset class.”
Look over the other 36 uses and use them as a
checklist. Identify risks you can’t afford to take, and
then transfer those risks to an insurance company.
1.
Maintaining
dependent’s current standard of living
2.
Retirement plan
“completion”
3.
Provide for
educational needs of dependents
4.
Provide care for
special needs family member
5.
Ensure future
insurability
6.
Ease financial stress
due to death
7.
Pay state transfer
taxes due to decoupling
8.
Pay federal transfer
taxes or capital gains taxes
9.
Pay taxes because of
income in respect to a decedent (IRD)
10.
Pay for burial and
other financial expense
11.
Create an estate
12.
Equalize inheritance
13.
Structure the
distribution of inheritance
14.
Provide charitable
gifts
15.
Replace assets used
for life income gifts
16.
Divorce-related issues
17.
Remarriage
18.
Protect business
assets
19.
Protect accumulated
wealth from tax erosion
20.
Settle debts and
obligations
21.
Pay off a home
mortgage
22.
Secure a loan
23.
Pension maximization
24.
Pay for long-term care
costs
25.
Create value lost in
market downturns
26.
Retirement income
27.
Income stream that
can’t be outlived
28.
Collateral for
business loans
29.
Funding buy/sell
agreements
30.
Key person insurance
31.
Non-qualified deferred
compensation
32.
162 executive bonus
33.
Retirement plans
34.
Employee group term
life insurance
35.
General access to
nonforfeiture values in a life contract
36.
Personal Split Dollar
37.
Replace qualified plan
assets used for LTC to reduce IRD