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REALITY IN LIFE INSURANCE
Asset Maximization Planning
How to Maximize Wealth, Minimize Tax
Liabilities, and Diversity Investment Risk
with the Power of Life Insurance
If you’re approaching retirement, or even if you’ve been retired for
ten years already, you probably know the importance of planning for
your financial future.
Now, many of us have reached that age where we start thinking
beyond our own future—and thinking about what will happen when
we’re gone—and our family, children, and grandchildren remain.
As you address the issues of asset protection, wealth maximize, and
estate planning you’ll want to consider the benefits of developing a
sound financial strategy—one that utilizes multiple investment
vehicles and asset classes—with the hope of maximizing your
wealth and passing that wealth to your heirs.
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888-407-0075
REALITY IN LIFE INSURANCE
If you considering leaving assets behind, you should know that
certain assets in your investment portfolio may be subject to income
taxes. Have you considered the consequences for your heirs or
beneficiaries if they forced to pay an estate tax, inheritance tax or
other income tax on the assets you choose to bequeath? What if
your assets are taxed by the state or federal government at the time
of your death?
Bottom line: if you want to preserve the wealth you’ve accumulated
for the next generation you need to think about wealth maximization
and put together a strategic plan that takes advantage of the various
investment vehicles at your disposal.
Because the truth is…taxation can significantly erode a portion of
your asset’s value.
“
If you want to preserve the wealth you’ve
accumulated for the next generation you need to
think about wealth maximization…
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888-407-0075
REALITY IN LIFE INSURANCE
Why Life Insurance Could be a Good
Addition to Your Investment Portfolio
The death benefit of a life insurance policy generally passes to the
beneficiary income tax free*, providing valuable cash that can be
used to pay taxes, debts and long-term obligations.
Unfortunately, we’ve found that many of our clients are unfamiliar
with how life insurance can help diversify and enhance the
predictability of an overall investment portfolio. And that’s why we’ve
written this brief guide on wealth maximization—so you know your
options, and have an example of an effective strategy to avoid the
erosion of assets at the time of your death.
Here’s two dead simple reasons life insurance may be a good
addition to your portfolio strategy:
dependability of a life insurance policy’s death benefit can
• The
give your investment portfolio balance and diversification.
features of a life insurance policy also make it an important
• The
tool when developing a strategy to recover and transfer wealth on
a tax-advantaged basis.
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888-407-0075
REALITY IN LIFE INSURANCE
Not Sure if This Strategy is Right For You?
Do You Meet Any of the Criteria Below?
❑ Have you accumulated different types of assets to grow capital
and wealth during their lifetime, and have reserved these assets
to pass to their spouse, children and/or grandchildren and that
will not be needed to meet their future income or emergency
needs.
❑ Are you a high net worth individual, age 55 - 85, single/married,
widowed, and insurable?
❑ Do you want to transfer wealth to loved ones with greater
predictability and less risk?
❑ Do you desire a wealth recovery strategy that may help offset
declines in portfolio values or stock market volatility?
❑ Do you have the need for life insurance and its death benefit
protection?
❑ Do you own assets that may include:
• Annuities
• Certificate of Deposits (CD’s)
• IRA’s
• Widows/widowers with B-Trust assets
• Rental Property
• Stocks and Bonds
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REALITY IN LIFE INSURANCE
Want a Real Life Example?
Meet Jeff Spencer
Jeff Spencer, widower, age 69, owns an investment portfolio that
includes $1.5 million in bonds and $4.5 million in stocks.
His investment portfolio has experienced a decline over the last year
due to market losses and volatility—which has impacted the financial
legacy Jeff wants to leave to his heirs.
Jeff’s retirement income needs are being satisfied by a pension plan
and income from rental properties. He has some flexibility with how
he structures his investment portfolio because the cash flow he
receives from the rental properties and pension provide a
comfortable lifestyle.
Jeff wants to diversify his portfolio, transfer wealth more predictably
to his children, and implement a wealth recovery strategy to offset
recent declines in portfolio values.
After a thorough review of Jeff’s situation, Jeff decided that he is
willing to gift a portion of his bonds to an irrevocable life insurance
trust (ILIT), using his available gift tax exclusion and exemption
amounts.
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888-407-0075
REALITY IN LIFE INSURANCE
Here’s the Steps We Took to Create a More
Predictable Transfer of Wealth
Step 1: Jeff and his Big Lou® advisor select a life insurance product
type that best fits his objectives. Various premium payment amounts
and methods can be compared (single-pay, level-pay, etc.).
Step 2: Jeff and his Big Lou® advisor evaluate the benefits of
purchasing a Universal Life Insurance policy from one of our many
insurance carrier partners. It’s determined that $250,000 paid for five
years would purchase a face amount of $2,785,000 of death benefit
protection guaranteed until Jeff turns 105 years old.
Step 3: Jeff and his Big Lou® advisor plan to liquidate investment
assets into cash over the next five years and transfer the cash to a
newly-created Irrevocable Life Insurance Trust (ILIT), using available
gift tax annual exclusions and/or a portion of his lifetime exemption
amount. The trust uses the funds to acquire the universal life policy
that was previously chosen. The death benefit will be free of income
and estate taxes, assuming a properly drafted ILIT. The policy’s death
benefit produces internal rates of return (IRRs) that compare
favorably to his existing portfolio assets and help diversify Jeff’s
overall wealth transfer strategy.
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888-407-0075
REALITY IN LIFE INSURANCE
The Results of Developing a Sound Asset
Maximization Strategy
The strategy helps Jeff accomplish a number of important financial
goals.
The reliability of the life insurance policy’s death
• Diversification:
benefit and cash accumulation helps Jeff diversify his overall
investment strategy.
Transfer: Jeff converted investment assets that were
• Wealth
subject to estate taxes, income taxes and market fluctuations into
life insurance in an ILI T. By doing so he secured the transfer of part
of his wealth to his heirs, income-tax free, estate-tax free and
without market fluctuations.
Recovery: The death benefit of the life insurance adds
• Wealth
value to Jeff’s overall wealth transfer strategy by helping to
potentially recover some of the portfolio value lost due to recent
market declines.
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REALITY IN LIFE INSURANCE
Now It’s Your Turn
Jeff accomplished his goals by thinking beyond matter-of-fact estate
planning—and considering the consequences of his current portfolio
structure—especially the tax consequences that would impact his
heirs when he was long gone.
Jeff feels relieved that he took the time to learn about wealth
maximization strategies from his Big Lou® advisor. And now it’s your
turn.
“
Contact Big Lou® today to see if you qualify for a
similar wealth maximization strategy—the advice is
free—but it could save you a fortune.