Using Life Insurance for Legacy Building
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Legacy building is a strategy that uses permanent life insurance to offer death benefit protection and efficiently pass on 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.
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 some other common traits of clients seeking a legacy building strategy using life insurance.
- Is 55-75 years old and has a retirement plan in place
- Needs death benefit protection or may have an underperforming life insurance policy that may need review
- Holds funds designated to leave to heirs or children in savings accounts or money market accounts, especially accounts designated as “payable/transfer on death” or POD/TOD
- Has titled assets jointly with heirs
- Has annuities coming out of surrender
- Currently takes required minimum distributions (RMDs), but doesn’t have a current need for the funds
- Consider a death benefit guarantee product:2 The death benefit guarantee offers assurance that the benefit will be available.
- 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.
1. Neither North American Company for Life and Health Insurance nor any of its agents, employees or representatives is authorized to give tax or legal advice. Advise customers to contact their own independent qualified tax or legal advisor before entering into or paying additional premiums with respect to such arrangements before commencing any charitable giving plan.
2. Subject to premium payment requirements.
FOR AGENT USE ONLY. NOT TO BE USED FOR CONSUMER SOLICITATION PURPOSES.