Senior Settlements
Life Insurance Strategies to Beat the Tax Code

Senior SettlementsDepending on the year you die, if your estate is worth more than $3M, taxes can take upwards of 50% of all your worth. Yes, that is correct; about half of your wealth could be wiped out as a result of tax liabilities. With correctly structured life insurance and advanced planning, those tax liabilities can be very effectively minimized or in some cases eliminated.

Also, seniors who use techniques such as policy loans and life insurance settlements (also called"senior settlements" or "life settlements") can generate cash and income. Seniors can actually leverage life insurance to multiply the value of their estate. The concepts introduced here are just some of the unique and innovative approaches that life insurance can be used for. No other investment can offer the outstanding returns and tax benefits of senior settlements and life insurance and every senior ought to explore the opportunities senior settlements provide. Most senior life insurance company in the market will help the seniors investigate senior settlements as an option.

Life insurance carries a unique tax status when properly structured. Death proceeds from a life insurance policy are triple tax free.

  • No income tax.
  • No capital gains taxes.
  • No estate tax or generation skipping transfer taxes.

Let us take the example of a $10 million estate. If the owner of this estate does not have proper planning, the heirs may be left with a $3 million to $5 million dollar tax bill (depending on the year of passing and the make up of the estate). At a joint age 60, a standard risk couple purchasing life insurance will return up to 10-1 leverage against premiums paid. This means that for a one time payment of $1 million a 60 year old married couple may purchase up to $10 million of life insurance which is payable to the beneficiaries triple tax free.

This hypothetical couple could multiply the net value of the estate transferred to their heirs over 200% or more (from $5 million to over $10 million) with life insurance.

In addition there are many creative ways to dramatically reduce the cost of acquiring life insurance that further increases its return. Rather than paying premiums from cash, seniors have the option to finance life insurance purchases at very favorable rates. Seniors using these financing options get all the benefits of life insurance without depleting their cash resources or estate.

Life Settlements and Estate Planning

Life settlements have become a very important potential strategy in estate planning for seniors. We believe that life settlements and estate planning go hand in hand for the benefit of seniors. Gone are the days when seniors who no longer wanted or couldn't afford their insurance had to just let the policy lapse or trade it in for a pittance. Now investors will buy life policies for substantial cash payments. This secondary senior settlements market offers an innovative source of wealth to seniors.


About the author:

David Mickelson, ChFC, AEP is an expert in wealth strategies for seniors. He has helped hundreds of seniors with life insurance, life settlements, and all aspects of estate planning.





 

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Unbeatable Tax Advantages

Taxes can take up to 50% of your wealth. An experienced Life Insurance professional can help you develop strategies that virtually eliminate the impact of taxes and may considerably increase your net worth.



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