Life insurance has many unique characteristics that may make it an appropriate solution for a variety of challenges, including providing payment of a death benefit at the death of the insured(s). In addition to death benefit protection, characteristics may include:
- Tax-deferred accumulation of policy cash values.
- Income tax-free death benefits.
- Tax-advantaged access to policy cash values. Please keep in mind loans and partial withdrawals may decrease the death benefit and cash value and may be subject to policy limitations and income tax.
The many flexible features that life insurance policies provide present appropriate uses for personal, business, and charitable situations.
Personal
- Family Protection: Provides a source of cash for surviving family members to utilize for living expenses.
- College Funding: Provides a funding source for college education of children or grandchildren.
- Debt Protection: Generates cash to pay off an existing mortgage or other personal debt.
- Wealth Creation: Provides funds to leave as an inheritance or to equalize inheritances among family members.
- Estate Tax Liquidity: Creates liquidity to pay estate taxes rather than requiring liquidation of existing estate assets.
- Gifting Leverage: Leverages the use of the annual gift tax exclusion, the lifetime exemption, and/or Generation Skipping Transfer Tax exemption.
Business
- Key Employee: Provides funds to aid in the search for a replacement in the event of death of a key employee.
- Executive Recruitment and Retention: Used in a variety of nonqualified benefit programs to help attract and retain key employees.
- Business Continuation: Provides funds to aid in the continuation of business in the event of death or disability of an owner.
- Succession Planning: Provides liquidity to purchase the ownership interest of a deceased owner.
- Debt Protection: Creates a pool of money that can be used to pay off borrowed money.
Charity
- Wealth Replacement: Used with many charitable gifting programs to replace, for heirs, the value of estate assets that were gifted to charity.
- Gift Creation: Used to create a significant donation to charity at death or during life.
- Gift Leverage: Used to maximize the eventual charitable donation at the death of the insured.
Although often mistakenly viewed as a price only decision, the long-term nature of life insurance necessitates careful consideration in the selection of the insurance carrier, the product type, and the agent to represent you and interact with your heirs. Some questions to consider in purchase include:
- Does the agent have a business succession plan that provides for continued service after the retirement or death of the original agent?
- Does the agent have sufficient experience to meet your needs adequately?
- Does the agent have any influence with the carrier selected?
- Is the insurance carrier financially sound?
- Does the carrier have a history of equitable treatment of existing policyholders?
- Will the service levels provided by the carrier satisfy your requirements?
- Will the product be able to adapt to changes in your personal and financial goals or situation?
- Are the pricing assumptions of the product economically sound?
- If a term purchase, what products may be converted?
Issues such as the ones above highlight the power of M Financial Group. M Member Firms, including our company, are comprised of successful and experienced professionals in the life insurance business. The collective buying power of M Financial allows Member Firms to utilize more favorable pricing experience than off-the-shelf products and to garner unique service considerations. These and other advantages through M Financial make the selection of a Member Firm as your representative a prudent choice. Please go to www.mfin.com/DisclosureStatement for further details regarding this relationship.
