Family

Life Insurance as an Asset Class

Life Insurance: An Efficient Wealth Transfer Tool

Life insurance is an asset that can efficiently transfer wealth within a family. Well-to-do families often use life insurance as part of their wealth transfer planning because it has a unique combination of potential advantages:

Predictable Value
Policy can be structured to pay a known death benefit amount when the insured dies.
Death Benefit Value Not Linked to Market Performance
Policy may be structured so that the death benefit is a fixed amount which is known in advance.
Liquidity
Death benefits are paid in cash when the insured dies; generally no taxes, costs, commissions or fees are
subtracted.
Growth / Leverage
Premiums paid for death benefit protection may provide a reasonable rate of return through life expectancy.
Federal Income Tax Free Payment
Policy death benefits (including amount in excess of premiums) are generally federal income tax free under IRC Section 101.
May Avoid Estate Taxes
Ownership of the policy may be structured to avoid federal estate taxes.
Avoids Probate
Death benefits may be structured to be paid directly to the beneficiaries without the costs and delays that often impact assets distributed through probate.
Now illustrate this concept with any of our UL or IUL policies!