As you grow older and join the “seniors” club, you may start thinking about what you want to leave behind once you’re gone—mainly if you’ve accumulated significant money over the years. Like most seniors, you’ll probably want to pass along some of this hard-earned money to your children, grandchildren, church, or even a favorite charity.
Luckily, a suitable life insurance product is designed to help seniors leave behind a legacy. It’s called single premium whole life (SPWL) insurance. An SPWL policy allows you to increase your estate value and provide your beneficiaries with an inheritance that’s potentially immune to federal taxes.
Because of the many benefits SPWL policies offer, this type of insurance is becoming increasingly popular among seniors. By simply placing a portion of your invested assets into an SPWL policy, you can reap the following rewards:
- Immediately increase the value of your estate
- Easily pass money directly to your beneficiaries, allowing them to avoid probate courts
- Provide an inheritance to beneficiaries that may be free of taxation
- Create a guaranteed lifetime death benefit
- Have the ability to receive the SPWL death benefit in the event of a catastrophic illness
- Avoid risk, even within a volatile market
- Pay a one-time premium without the need for renewals
- Access guaranteed cash values without penalty after the first policy for financial emergencies (Depending upon the policy provisions)
Are you an ideal candidate?
If you want to leave an inheritance to your loved ones or a charity, and you’ve already designated a portion of your assets, you’re the ideal candidate for an SPWL policy. You should never use any funds necessary for daily living expenses to buy an SPWL policy. However, you may want to tap into liquid assets, such as CDs, money market accounts, and treasury securities, which are ideal for purchasing a policy.
Incredible tax savings
If you invest in mutual funds, stocks or even CDs, savings bonds, and money market funds, your assets’ growth are subject to taxes. However, transferring your assets to an SPWL allows you to set up an inheritance free from federal income tax. That’s because death benefits from life insurance policies are generally not taxable.
Plus, as long as you properly designate beneficiaries on the SPWL policy, your heirs will avoid probate court. You’ll want to work closely with Brian Gruss to ensure that your beneficiary designations are set up correctly.
A case study
Here’s an example of how an SPWL policy can greatly benefit both you and your beneficiaries: Let’s say 65-year-old Betty, who is a non-tobacco user, plans to leave a CD worth $50,000 to her grandchildren when she dies. When she transfers this $50,000 from the CD to an SPWL policy, she can purchase a guaranteed life-death benefit worth $98,814. In other words, Betty has just increased this portion of her estate by nearly 50%, doubling the inheritance for her grandchildren.
Additionally, the death benefit will likely be free of income taxes for her grandchildren. On top of that, Betty no longer has to pay tax on the interest earned for the CD.
An effective legacy tool
Considering these countless advantages, it’s clear that an SPWL policy is an effective way to leave a legacy behind. Ask Brian Gruss about Single Premium Whole Life insurance if you want to protect your assets from taxes and increase your inheritance values.