How To Multiple Your Inheritance While Avoiding Taxes
While we are doing our retirement planning, most of us also consider the next generation. We would all like to leave 
money behind to our spouses, kids, grandkids, or even a favorite charity. It is our way of trying to do some good, even after we have left this world behind. For middle class people, the problem of taking care of our retirement needs, while trying to leave an estate, is a tough and common dilemna. We consider products like annuities to provide income for our golden years, but as we think of ourselves, we do not want to leave others out of our thoughts.
Single Premium Life Insurance (SPLI) is one way to be able to multiply an estate, and also to help our beneficiaries avoid inheritance taxes. Now keep in mind, that because this type of life insurance is paid for with one premium, it may not be treated the same by the IRS as traditional life insurance that is paid for over a span of years. When you sit down and look at individual products, with an insurance agent, they should be able to illustrate the benefits of SPLI, and you can determine if they outweight the disadvantages.
You can learn more about this here – Single Premium Life Insurance Explained.
What Is SPLI? It is, simply, a type of whole life that is paid for with only one large premium when you buy your policy. This means that the actual coverage is funded quickly, and so the cash value can grow quickly. The cash, or asset, value of the policy will usually grow with a set interest rate or some type of market index (i.e. S&P 500).
Turn Cash Into A Larger Death Benefit
The main goal is to take one amount of money and turn it into a larger death benefit. Most people’s premium will pay for a much larger amount of life insurance. So this is good if you have some amount of cash that you can aside with the main goal of leaving a larger estate behind to your loved ones or a chartiy.
Build An Asset For Yourself Too
Secondary goals could be building up a cash value that you can use while you are alive. In order to realize any benefit from this, you must be prepared to leave the policy alone for enough time so you do not have to pay any surrender charges. Surrender charges differ by individual policy, so that will be one more factor to consider. But once you do realize some asseet growth, you can borrow against the policy, or you can cash it in.
Many policies have some additional provisons that can help you avoid the cost of long term care insurance too. They may allow you to take a portion of the actual death benefit while you are still alive if you are terminally ill or confined to a nursing home. Again, you need to look at the details of an individual policy.
You may also be able to take advantage of something called a senior life settlement to get cash out of your policy that is more than the surrender value, and is some percentage of the actual death benefit.
You can start researching this product with senior life insurance quotes.
Related posts brought to you by Yet Another Related Posts Plugin.
Recent Feedback