Life insurance is a fundamental part of a responsible andreliable financial strategy. While it only takes a little planningfor your clients to protect themselves and their families fromfuture instability, shockingly around 49 percent of the adultpopulation do not have any kind of life insurance.

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Related: Expect the best, prepare for theworst

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Many of these people believe a life insurance policy is eithertoo expensive, too complex, or simply impossible to understand —and because of this, their families are left unprotected in theevent of an unfortunate tragedy.

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Perhaps one of the most significant problems is that peopleassume they can only use life insurance for limited functions, suchas paying off mortgages or funeral costs.

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The truth is, life insurance can be highly versatile,customizable, and often perfect for creating a sanctuary againstthe unpredictability of the future.

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If you are a life insurance agent, you know all of this. Butsome new agents and advisors who come in from outside the lifeinsurance sector may not understand how useful, and versatile, lifeinsurance can be.

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Even if you are a life insurance veteran and have all of thismemorized, in several different languages, it maybe useful to seehow all of this looks to consumers who are vague on just what lifeinsurance does.

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Related: 2016's top 10 life insurance providers ranked byNAIC

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Here's a look at some of the uses for life insurance that manyordinary people may not have considered before.

1. Equalizing inheritances

In an ideal world, most of us would prefer to offer an equalinheritance to each of our heirs. Unfortunately, the nature of theclients' assets may make this impossible.

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For instance, it can be challenging for more than one person toshare an inherited home or business, in most circumstances. Lifeinsurance can provide a solution to this problem, by allowing theclient to give the monetary value of an asset — in cash — to oneheir, while leaving the asset itself to another heir.

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In other words, rather than liquidating the asset anddistributing the cash amongst each person in the client's family,life insurance can provide a cash value equal to that of the assetitself.

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A family business owner can therefore give a business to one ofhis or her children, while also givingthe value of the business (in cash) to thechildren uninterested in running the company. An insurance policythat offers a cash alternative to certain assets can help theclient balance out complexities in financial planning — and givethe client a clearer view of how to organize the future.

2. Protecting a business with COLI

For those who run a business, the life insurance "cash value"generated from the client's long-term investments can sometimes paythe premiums on a corporate-owned life insurance policy, orCOLI.

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For decades, commercial banks have been purchasing key-personlife insurance on executive individuals — with benefits payable tothe organization and/or the family of the employee, upon death.Now, corporations and non-profits can achieve the samebenefits.

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COLI policies can give businesses the opportunity to fundbenefit plan expenses, while increasing net income for the companyoverall. For instance, companies that have substantial costs to payout for group life, medical, and other insurance plans can financethese costs with COLI.

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Many business owners look to enhance and protect theirinvestments with COLI, because it can earn a competitive after-taxyield when compared to other investments, act as a hedge againstbenefit liabilities, match the long-term nature of benefitexpenses, and more. COLI death benefits can even help the companyrecover the costs of the plan over the long-term.

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While these policies can perform in a similar way toindividually-owned life insurance policies, corporate packages canoffer several advantages that other policies simply cannot matchwhile promoting growth and limiting risk.

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Related: Why talk about life insurance when you can talkabout zombies?

3. Accessing personal loans

We often consider taxes to be an inescapable part of life.However, life insurance is one of the few products that can offeruseful ways to sidestep certain taxes. Many life insurance policiesoffer owners a tax-free solution to their financial needs, upon theinsured’s death. What's more, while the client is living, it’ssometimes possible to take tax-free loans from the cash value of apolicy.

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When the client takes out a life insurance policy, the clientcan begin to accumulate "cash value." It is possible, in certaincircumstances, to access this value using loans and withdrawals.Though the client should expect to pay interest on these loans —just as the client would with a loan from a traditional bank — theclient will not pay taxes on the money you receive.

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In certain policies, the interest rate on the withdrawal fromthe client's life insurance cash value is lower than a typical bankloan. However, the client's policy-provider may ask the client touse the death benefit as collateral. This means that if the clientdies before the client repays the loan, the client's death benefitwill fall by the amount outstanding.

4. Replacing essential income

As the client moves through life, the client will likelyaccumulate a range of expenses — from large debts like mortgagesand loans, to smaller emergency payments, like medical bills.

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If the client is struggling to pay for these expenses, theclient may be able to use withdrawals from the client's lifeinsurance cash value as a source of additionalincome. Some financial planners recommend using life insuranceto cover estate taxes so their other investments can continue tothrive, unimpeded by taxes, well beyond the death of theinsured.

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Even if client is still working, the client's life insurancepolicy can offer a source of much-needed additional wealth inunexpected situations.

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For instance, as people today are living and working longer thanprevious generations, it's important to think about how clientswill take care of themselves if they suffer from a long-termillness. On the other hand, clients may find that they suddenlyneed additional cash for child care, or the long-term care of arelative.

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In addition to the tax-free access to your cash value, someinsurance policies offer an added provision called a "rider," whichcan trigger some of the death benefit to be paid out while theinsured is still living, under certain circumstances, such as acritical illness. The funds are available to use for any reason.

5. Legacy planning

Finally, whether the client is looking for a way to maintainclient's business after the client passes away, or to ensure theclient's loved ones receive the care and assistance they need whenthe client is gone, life insurance can play a big part in planningthe client's legacy.

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As a tax-free source of money, the client can use your lifeinsurance value to pay for charitable contributions — allowing theclient to have a long-term impact on an important cause. Or, use itto pay off taxes, debts, and other expenses that might make thefuture difficult for the client's family.

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Although many people think about providing an income for theirheirs, or paying funeral expenses, as the fundamental purpose for alife insurance policy; they may forget about using that cash tofund new opportunities for their loved ones.

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Legacy planning with life insurance may mean that if anythinghappens to the client, the client'schildren can still go to collegewithout the burden of debt. Death benefits can pay for tuition,giving the client peace of mind of knowing that the client canstill help loved ones accomplish their dreams.

The true value of life insurance policies

The primary purpose of a life insurance policy is to offer asource of relief for the client's family after the client passesaway. However, it's important to remember that life insurance canalso act as a flexible financial tool — perfect for leveraging arange of solutions to common problems.

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From giving the client the freedom to maximize the client'sbenefits after retirement with additional resources to a standardpension, to helping the client plan for the future, or improve theprofits of the client's business, a well-planned life insurancepolicy can be a crucial financial strategy.

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Don’t forget to encourage your clients to examine life insuranceopportunities from all angles, to determine what’s best for them,their families and their future.

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