As the years start accumulating and you find yourself saying yes to the senior citizen discounts, you might start pondering what you’ll leave to your offspring, other loved ones, religious groups, or favorite charities. This is especially true if you’ve managed to
Single Premium Whole Life Policies
One tool available for such purposes is an insurance product called single premium whole life (SPWL). It’s specifically designed to help seniors leave behind a legacy to their loved ones. By placing a portion of your invested income into an SPWL policy, it will not only allow you to immediately increase the value of your estate, but also potentially leave your beneficiaries an inheritance not subject to federal taxes. In fact, the abundance of benefits and rewards an SPWL policy offers is one of the main reasons that SPWL policies are quickly becoming one of the most popular choices among seniors. Here are some of the other benefits and rewards offered by SPWL policies:
* Depending on the provisions of the policy, you may access guaranteed cash values for emergencies without being subject to penalty
* Makes the volatility of the financial market a moot point and helps you avoid risk.
* Avoids probate courts and allows you to easily pass your hard-earned dollars directly to your beneficiaries.
* SPWL death benefits can even be received in the event of a catastrophic illness.
* Creates a guaranteed lifetime death benefit.
* Ability to pay a once-only premium that doesn’t need to be renewed.
As mentioned above, the tax savings can be substantial. Growth of assets within mutual funds, stocks, saving bonds, money market funds, and CD’s are all subject to taxation. On the other hand, if those assets are transferred to an SPWL, the inheritance you leave behind can potentially be free from the federal income tax since life insurance death benefits aren’t usually taxable. Additionally, be sure to work closely with your SPWL insurance agent and financial adviser to make sure that your beneficiary designations are correctly listed. Your beneficiaries can avoid the long ordeal of probate court if you designate them correctly on your SPWL policy.
Would An SPWL Policy Be Right For Me?
You’re an ideal candidate for an SPWL policy if you’ve decided you’d like to leave an inheritance to your loved ones or a charitable entity and have designated a portion of your assets to do it. Do keep in mind that funds already designated or necessary to your daily living expenses wouldn’t be appropriate funding sources for an SPWL policy. CDs, treasury securities, money market accounts, or other liquid assets are usually the best choices for funding the purchase of an SPWL policy.
Let’s say that you’re 65-years-old, a non-smoker, and have an existing $50,000 CD that you’d like to leave your grandchild when you pass away. If you were to transfer the $50,000 from your CD to an SPWL policy, you’d be able to purchase a guaranteed life death benefit of a little over $98,000. You’ve just managed to almost double the value of your estate and the inheritance for your grandchild. You’re not paying any more taxes on the interest earned from the CD. And, the grandchild will most likely not have to pay income taxes on the death benefit that they receive.
Financial advantages like tax protection and the ability to increase the value of the inheritance you leave behind clearly make SPWL polices an effective legacy tool and something worthy of asking Brian Gruss 352-508-4221 about.