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Why Life Insurance:

The main reason for buying life insurance is to provide a death benefit for your loved ones. But it can also help supplement the cost of your grandchildren’s education.

Life insurance could be the ultimate gift to your children and grandchildren. Life insurance can provide the reassurance that your loved ones will be protected, should the unexpected occur. And it can benefit your loved ones in other ways, too.

Using life insurance to help fund a grandchild’s college education offers many advantages.

There are no complex eligibility requirements, no qualified education costs, and no income limits to consider. Plus, a policy loan generally won’t affect your grandchild’s eligibility for other financial aid. Keep in mind, most life insurance policies require health underwriting, and in some cases, financial underwriting.

It may be an effective way to get the reassurance of a death benefit – while also helping provide for a college education. And it’s just one of the many ways life insurance can help you create a legacy

Life Insurance can provide a death benefit and allow a married couple to delay and increase their Social Security benefits.

There may come a time when you may need to think about the future generations of your family. You have worked hard, accomplished your goals, and accumulated funds to support a comfortable retirement. Along with your careful planning, maybe you would like to set aside funds to pass along to your children or grandchildren. Whether the amount is a little or a lot, wouldn’t it be nice to help ensure those funds are passed along in a tax efficient manner? This would help maximize the money you can provide to your heirs. Life insurance provides death benefit protection and can help increase the value of the funds you pass along to beneficiaries. Legacy building, also referred to as wealth transfer, is simply a plan using life insurance to pass along money to your beneficiaries in a way that’s most favorable for them and for you.

Life insurance provides a death benefit, which can help provide financial security to beneficiaries generally income tax-free. For legacy building, life insurance offers the same two key benefits:

  1. It helps to provide financial protection and passes along a generally income tax-free death benefit.
  2. It can help maximize the funds you pass along— whether it’s for your children or grandchildren, a church, or perhaps a charity.
If you have set aside funds, you owe it to yourself to explore how life insurance can help efficiently pass those funds along to your beneficiaries.

Here is how life insurance can be used to maximize pension benefits.

  1. The participant in the defined benefit pension plan purchases a life insurance policy to replace lost income after the participant dies. The death benefit should be an amount that can provide the spouse the same monthly payment amount as the Joint and Survivor option. The spouse is named as the beneficiary of the life insurance policy.
  2. Upon election of pension benefits at retirement, the Life Only benefit is selected rather than the Joint and Survivor benefit.
  3. Upon death of the participant, the life insurance death benefit is paid to the spouse.  The pension benefits stop.
  4. The life insurance death benefit is then used to provide income for the surviving spouse.

Pension maximization using life insurance is a way to gain needed death benefit protection while helping you get the most out of your defined pension benefits. If you are a participant in a traditional pension plan (also referred to as a “defined benefit plan”), you have a plan that is designed to provide you with monthly income payments upon retirement. First, however, you must make an irrevocable choice. Typically, your employer will give you two options for how the benefits will be paid—Life Only Benefit or Joint and Survivor Benefit. The Life Only option pays you the maximum benefit, but upon your death, your spouse does not continue to receive payments. The Joint and Survivor option pays a reduced benefit, but your spouse will continue to receive benefits when you die. The pension maximization strategy using life insurance is designed to be a compromise between the two options. It allows you to receive the higher pension benefit while also providing funds for your spouse in the form of a death benefit.