The Joy of Giving: Transferring Assets to Heirs

Posted: October 15, 2020 by John Welcom

Life Settlement The Joy of Giving

A traditional way to leave a legacy is to establish an estate plan. It ensures that any remaining money upon passing away is left to predetermined, designated people (or causes), who in turn can enrich their own lives and potentially, the lives of others. However, many financial advisors help their clients experience the joy of giving while they are still alive, with wealth preservation and asset allocation strategies. One such strategy is examining an often overlooked asset in a client’s portfolio, enhanced by changes in the relevant tax law.

A traditional way to leave a legacy is to establish an estate plan. It ensures that any remaining money upon passing away is left to predetermined, designated people (or causes), who in turn can enrich their own lives and potentially, the lives of others.

However, many financial advisors help their clients experience the joy of giving while they are still alive, with wealth preservation and asset allocation strategies. One such strategy is examining an often overlooked asset in a client’s portfolio, enhanced by changes in the relevant tax law.

Revisiting Life Insurance for Estate Planning

Wealthy consumers historically have purchased life insurance policies as a vehicle for helping pay large estate tax bills after passing away. However, the law was changed in 2017 to double the federal estate tax exemption.  It is now $11.2 million per individual and $22.4 million, with portability, for a married couple — at least until 2025.  With the modification, only 1,800 estates each year will be subject to federal estate taxes.  Therefore, the vast majority of Americans who purchased a life insurance policy for estate taxation purposes will no longer be subject to the tax.

Trusted advisors should review their senior clients’ estate plans to determine whether their life insurance policy is still serving its intended purpose. If it is not, then exiting an obsolete life insurance policy, in a prudent and recommended way as a life settlement, if eligible, can save policy owners tens of thousands of dollars in annual premium costs.  A life settlement will also provide portfolio liquidity, affording consumers the opportunity to experience the joy of giving sooner rather than later.

The Life Settlement Option

Americans have had an established legal right to sell a life insurance policy for more than 100 years. The courts have consistently held that a life insurance policy is personal property and can be sold just like any other asset, such as a house or a stock.

The ability to sell a life insurance policy as a life settlement is an important option for policy owners to have in the event that they no longer need or can afford it. Rather than simply lapsing or surrendering the life insurance policy back to the insurance company, owners can sell their life insurance policy to a licensed third party representing institutional funds for cash that is greater than the surrender value but less than the death benefit.

In a life settlement, the purchaser of the life insurance policy assumes all future premium payments – thereby eliminating the burden for policy owners - and receives the death benefit upon the death of the insured. Candidates for life settlements are typically 70 years or older, with a life insurance policy that has a death benefit of at least $100,000.

The Next Step

The joy of giving can be accelerated with a life settlement. Click here to find out if a policy owner qualifies for a life settlement.

Sell Your Life Insurance Here

Click here to download: The Joy of Giving: Transferring Assets to Heirs




Recent Blogs

Advisors Take Notice: New Report Forecasts Double-Digit Growth in Life Settlement Market

Advisors Take Notice: New Report Forecasts Double-Digit Growth in Life Settlement Market

Posted: April 01, 2024 by John Welcom

If you're a financial advisor with senior clients, it's important to be aware of the life settlement option. Life settlements can be a great way for seniors to generate immediate cash and el...

Passive Income Sources

Finding Cash Flow from Passive Income Sources

Posted: March 25, 2024 by John Welcom

Tired of chasing high-risk investments or selling off assets to cover retirement expenses? Discover 8 proven ways to create passive income streams and enjoy a more comfortable retirement. Plus, learn how a life insurance policy you no longer need m...

New Longevity Risk Underwriting Tools Improve the Stability of the Life Settlement Market

New Longevity Risk Underwriting Tools Improve the Stability of the Life Settlement Market

Posted: March 15, 2024 by John Welcom

The pricing of life insurance products is tied to the forecast of an insured’s life expectancy—what insurance experts call “longevity risk"—and relies on an estimate of the insured�...




Sell Your Life Insurance policy Sell Your Life Insurance policy