Protect Your Heirs – Tax Free Wealth Transfer

>> Thursday, May 12, 2011

Wealth Transfer – What is The Best Method?

First, the bad news: Life insurance premiums (subject to few exceptions) are not deductible. The good news: Depending on your age and health, a small amount of premium can multiply your after-tax wealth. Why?… because life insurance, courtesy of the Internal Revenue Code, puts you in a tax-free environment: during your life, at your death and beyond.

Single Premium Whole Life Insurance plans can simplify wealth transfer to the next generation and provide living values during the owner’s lifetime. We offer several plans that provide early cash withdrawal options, benefits for long term care, withdrawals for terminal illness and confined care.

This form of life insurance requires a single large upfront payment.  But, it offers a steady rate of return with a guaranteed minimum face value on the policy. Some policies offer a fixed rate return while others offer other investment options. The fixed rate of return is usually lower than the final value of policies using the investment options. But, it offers a steady rate of return with a guaranteed minimum face value on the policy.

How common is this type of life insurance?

Actually, it is very uncommon. It is one of the rarest forms of life insurance issued in the insurance market.  One reason for this is because many people do not know of its existence.

This is mainly due to the fact that it requires a large upfront payment. If someone has that type of money, the customer may not have interest in an investment with a low rate of return. However, it offers a steady investment that some may find appealing.

What is a major benefit of this of insurance?

It provides a tax-deferred method of passing on an inheritance.

Single premium life insurance is actually a good tax shelter. It offers a tax deferred investment where money can build up. There are no penalties related to the money when it pays upon the demise of the named insured. The only time taxes become an issue is if the policyholder makes a loan or partial withdrawal on the policy, this is an excellent option.

Single premium life insurance can help the policyholder.

Some policies allow withdrawals to pay for long-term care insurance. Others offer withdrawals related to caring for the named insured if that person is diagnosed with a terminal illness expected to take life within one year. The amount of money paid upon the death of the named insured will vary depending on the age of that person and the amount invested at the beginning of the policy. Others offer withdrawals related to caring for the named insured if that person is diagnosed with a terminal illness expected to take life within one year policy.

The form of single premium life is single premium whole life insurance. This option comes with a guaranteed return rate each year the policy remains active. The amount may be low each year, but it compounds and can become substantial over a number of years. The biggest benefit of this type of policy is that it provides a minimum amount of return on the amount invested. The risk of the investment falls with the insurance company instead of the named insured’s beneficiaries.

To determine the best coverage for you, talk with a  Life Insurance specialist at (888) 583-5070.

Rodney Gilbert, CLTC, is a Registered Financial Representative and CEO of United Life Financial LLC and Rodney has been assisting his clients achieve their financial objectives since 2007. He holds Series 6 and Series 63 licenses and the Certification in Long Term Care (CLTC) Designation. Rodney is also an avid speaker to those who want to learn more about tax planning with IRAs. For additional information, visit and for life and health insurance quotes. Remember, this blog is for information only and is not an offer to sell or invest in securities. Please refer to all appropriate prospectuses prior to any investment. Investments can, and do, lose money.



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