Life insurance-related strategies may help you to achieve your various investment objectives. Here are some examples:
Life insurance is a thoughtful way to take care of your loved ones, even in the unfortunate event of your premature passing. Term life insurance is a popular choice for this purpose, as it offers coverage for a set period of time, usually between 10 and 20 years. It may not accumulate cash value, but it is budget-friendly and gives you and your family peace of mind, knowing that they will be taken care of.
Permanent life insurance options like whole life, single life or joint life policies provide lifetime coverage and tax-efficient ways to pass money to family and funding special needs trusts. It’s a great option for wealth transfer planning.
Life insurance can be a valuable tool for businesses, not only as a way to protect against the loss of a key owner or employee, but also as a means to fund important agreements and plans. A buy-sell agreement, for example, can be funded through life insurance, ensuring a smooth transition of business interests in the event of an unexpected death or sale. It can also be used to provide insurance as an employee benefit, or to fund split dollar arrangements or qualified retirement plans. With life insurance, you can have peace of mind knowing that your business is protected and your employees are taken care of.
Life insurance can also serve as a tax-deferred way to accumulate cash value, Whole life insurance policies in particular, build cash value that can typically be accessed tax-free through policy loans and surrenders. This cash value can be used to your advantage, however, it’s important to keep in mind that loans against your policy accrue interest and decrease the death benefit and cash value by the amount of the outstanding loan and interest.
**Commonwealth Financial Network® and The Wealth Transition Collective do not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation.