ZINSURANCE |
A blog to help you prepare for life's unexpected
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ZINSURANCE |
A blog to help you prepare for life's unexpected
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![]() The month of August is back to school for many families and is also What Will Be Your Legacy Month, which has inspired this month’s Zinsurance blog. Especially during back to school, the hustle and bustle of more demanding schedules, juggling many activities and responsibilities, and preparing for the onset of numerous holidays places family in the forefront as you prepare to manage it all on a day-to-day basis. Whether you are a Millennial, Generation X, Baby Boomer, or of the Silent Generation, taking care of your next generation takes on very different priorities depending on how you are approaching your financial planning right now. The question then becomes, are you covering all your bases or taking a chance that could negatively impact what you desire for your next generation or is unintentionally hindering your ability to leverage your income and assets right now as effectively as you could. If legacy planning is important to you as an aspect of your financial plan, considering what it will look like for your next generation while also taking care of your needs throughout your life are key considerations. IRA Leveraged![]() A 78-year-old client had an IRA valued at $350k, which he wanted to leave to his family for legacy planning, as he was not going to use this money as a part of his retirement income distribution. He was in good physical health for his age bracket, resulting in him being designated as Preferred by life insurance underwriting. Due to his Preferred status, he was able to maximize the amount of money he could leave his family through taking a distribution that could buy him a life insurance policy with a $601k death benefit for his beneficiaries, potentially generating a higher payout to his family tax free. Premium Overhaul![]() A client couple in their mid-40’s with two school-age children were making a good income and were also astute to have life insurance policies to prepare them for the unexpected. However, they were paying high premiums on two different insurance policies and decided to investigate options to reduce their out-of-pocket obligation. The wife had an insurance policy valued at $2 million costing $30k a year in premiums. The husband had a $1.5 million policy which was costing around $18k per year. With the couple both being in excellent health, we re-evaluated their insurance policies to see if their monetary obligation could be reduced. Their newly hired financial advisor hoped to be able to free up some of their money being applied to life insurance to be allocated to other financial instruments or options. The couple wanted to maintain the insurance policy values desired. What we found was that the insurance policies they had were not in alignment with what was in their best interests from a financial planning standpoint. Because leaving a legacy to their children was important to them, we recommended surrendering their current policies and purchasing a survivorship policy valued at $3.5 million payable upon both of their deaths, combined with two $1 million term policies for the wife and the husband separately, just in case, while their children were still young. The end result was over a $37,000 savings in premium costs that could be allocated to wealth creation within their financial plan. 5 Key Questions to Ask – Life Insurance & Your Legacy![]() According to a study by HSBC bank reported in LegalZoom, 74% of working age people around the world plan to leave an inheritance to their children. When considering how you would like your legacy to play out financially for your next generation, here are some questions to ask yourself to make the best life insurance decisions for what matters most to you.
When it comes to bequeathing your assets and leveraging insurance to benefit loved ones or next of kin, there is so much more involved than merely having a will. To effectively cover yourself as well as your loved ones, considering how you can prepare, protect, and project will go a long way for your peace of mind. For Your Future, Lori Capozza Zeind www.lczconsulting.com P.S. Check out our Insights Library for additional articles and resources by CLICKING HERE.
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About the BlogHi, I’m Lori Capozza Zeind, Archives
April 2023
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