Life insurance has many unique characteristics that may make it an appropriate solution for a variety of challenges, including providing payment of a death benefit at the death of the insured(s). In addition to death benefit protection, characteristics may include:
- Tax-deferred accumulation of policy cash values.
- Income tax-free death benefits.
- Tax-advantaged access to policy cash values. Please keep in mind loans and partial withdrawals may decrease the death benefit and cash value and may be subject to policy limitations and income tax.
- Some personal planning solutions using life insurance include:
- Family Preservation: Provides a source of cash for surviving family members to utilize for living expenses.
- College Funding: Provides a funding source for college education of children or grandchildren.
- Debt Safeguard: Generates cash to pay off an existing mortgage or other personal debt.
- Wealth Preservation: Provides funds to leave as an inheritance or to equalize inheritances among family members.
- Estate Tax Liquidity: Creates liquidity to pay estate taxes rather than requiring liquidation of existing estate assets.
- Gifting Leverage: Leverages the use of the annual gift tax exclusion, the lifetime exemption, and/or Generation Skipping Transfer Tax exemption.