There are several reasons for families...to get educated on how a permanent life policy may benefit them.
Toms River, NJ (PRWEB) May 24, 2013
The first reason to consider is the incredible value of a death benefit that is free from both federal and state taxes. “Many retirees since 2000 have found that their retirement nest eggs are less than they had projected due to poor stock market returns and factors like forced early retirement,” says Brian Solik, President of Wealth Preservation Strategies of NJ. “These retirees are concerned that their money might not last.”
For a married couple, if one spouse predeceases the other, the remaining spouse faces a drop in social security income and possibly pension income. “Let’s say a wife outlives her husband by twenty years and receives $12,000 a year less in social security income after his death. This widow is out a total of $240,000, which could have easily been replaced by a permanent life insurance policy, if it were in place,” comments Solik.
If a pension is involved, a spouse can choose the highest payout option if they either already have or decide at that time to put in place a permanent life policy. “With this strategy,” Solik explains, “if the pensioner lives a long life, the household will have more income. If he or she dies, the remaining spouse can have the loss of income covered by a tax-free death benefit.”
Another reason for having a permanent life insurance policy is to maximize the money left to heirs. “In my experience,” comments Solik, a veteran financial advisor who focuses on helping people preserve their money from stock market risk and taxation, “most retirees don’t want to use up their principal and die with nothing to leave for their loved ones. They would much rather live on the interest and growth of their money and leave the principal to their children, other heirs, or charity.”
This is very difficult for even the wealthy to accomplish, particularly when stock market returns are poor and interest rates are so low. However, if one has a permanent life insurance policy, at least a portion of your assets will be replaced by a death benefit free from federal and state taxes. “With this plan, one can have the freedom to enjoy one’s money in retirement and not worry about spending down some or even a major portion of one’s assets,” Solik explains. “With proper planning, the assets you spend down can be replaced.”
A third reason to consider having a permanent life policy is to utilize the ability to build up substantial cash and then use it during retirement without paying federal or state taxes, as has been outlined in previous articles by Mr. Solik. Since almost all investments are either taxable or tax-deferred, having an account which one can draw on for income without paying Uncle Sam his portion is a huge advantage for retirees. “Cash value life policies are quite flexible” explains Solik. “For example, there are no limits to how much one can contribute, and high wage-earners can also participate.”
“Although it’s not necessarily a good fit for everyone, there are several reasons for families from the middle class to the rich to get educated on how a permanent life policy may benefit them and their heirs,” concludes Solik.
Brian Solik, CRPC is President and Founder of Wealth Preservations Strategies of NJ. He is a former Wall Street broker who now focuses on educating investors on how to maximize their financial security and minimize taxes. If you would like to receive his regular newsletter contact Brian at 732-415-7717, firstname.lastname@example.org or visit his website http://www.wpsnj.com.
Securities and investment advisory services offered through Brokers International Financial Services, LLC, Panora, Iowa. Member FINRA/SIPC. Brokers International Financial Services, LLC and Wealth Preservation Strategies of NJ are not affiliated companies. The opinions expressed are those of Brian Solik and not necessarily those of Brokers International Financial Services, LLC.