A traditional life insurance plan provides cash benefits to loved ones when the insured passes away. Did you know that Life insurance can also be constructed to solve individual and business commitments? Below are five examples of how life insurance can be designed to solve family & business needs:
A life insurance plan on each of the investors could be used to pay off the beneficiaries of the deceased in the event of death. This would allow the remaining investors to keep and control the property and continue with their operation.
By depositing the lazy money into a cash value life insurance plan, you can obtain a very conservative rate of return of 5% and keep 100% liquidity on your savings. This plan will also provide your beneficiaries with 150-200% leverage on those funds immediately. If you deposit 100k, then your beneficiaries will receive approximately $150-200K in benefits. The death benefit would also continue to increase over time.
A cash value life insurance plan owned by the company on the life of the key employee would provide funds to the business so that it can find a successor. The premiums are paid by the business on an annual or monthly basis. Since the policy is owned by the business, the company would be able to use the cash value for any purpose.
A pension maximization strategy uses the difference in the maximum retirement benefit and their reduced amount for their survivor to obtain a higher benefit. For example if the pension is $5,000.00 and the reduced benefit for employee and survivor is $4,200.00. Then $800.00/ monthly or less can be allocated to a permanent life insurance plan in order to generate a higher benefit to the survivor.
There are four significant benefits from this strategy:
A life insurance plan attained for the purpose of replacing the loss income would enable dependents to continue to meet obligations without having a “fire sale”. The policy can be designed to replace the income over a specified amount of years.
The Bottom Line
Life insurance plans can be designed to solve many financial situations that can arise when an individual passes away. A life insurance agent can assist in designing and implementing a plan to solve each scenario.
Red Lion Financial’s Quoting tool is a great place to begin your comparison.
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