Affordable Life Insurance
The Benefits of Life Insurance
Life Insurance is a product solution used to provide a death benefit to heirs after the death of the insured. There are various reasons to purchase life insurance, but two of the most frequent reasons are to replace the loss of income or to pay off debt.
These policies provide a tax-free death benefit to the beneficiaries when the insured passes away. This death benefit can be used to pay off any outstanding debt, such as a mortgage or a large student loan balance. Also, the death benefit can be used to support the remaining family members if the insured was the primary income earner.
How Life Insurance Works
Many families will buy a life policy to cover their outstanding debt, including their mortgage balance. By paying off financial debt with life insurance benefits, beneficiaries are relieved of the burden of ongoing payments. Additionally, life insurance is commonly used to replace lost income, especially if the household is dependent on one income source.
For example, if the breadwinner passes away, the death benefit can be used to fulfill income needs. This means the surviving spouse does not always need to return to work. If income needs are not an issue, the death benefit can be used towards retirement, college education, or future financial investments. A household with only one income may find it difficult to accumulate savings, which is why the death benefit can be a valuable asset.
Getting Started is Easy
Our goal is to ensure that your life insurance covers the remainder of the mortgage on your house and work with you to ensure that your surviving spouse and dependents will have sufficient income. We will discuss your other assets, retirement benefits, and social security to determine their income needs. Your current age, health, and your spouse’s earnings potential are essential factors.
Estate Tax Liability: We recognize the need for liquidity at death to offset estate taxes and maximize the transfer of assets to future generations. We want to consult with your attorney or bring in a legal specialist to plan for a favorable result.
There are plenty of different policy structures that may be considered when purchasing life insurance coverage. We will assist in
Analysis of Existing Policies
- Other Financial Obligations
- Wills and Trusts
- Savings
- Investments
- Retirement Benefits
We can help you select coverage from a variety of life insurance options to meet the needs identified in your financial security plan.
Considerations When Purchasing Life Insurance
| Situation | Issues/Objectives | |
| Do you own a family business? | How to pass estate/business to 2nd generation equitably | |
| Do you own annuities/IRA accounts of $500K+? | Income in respect of decedent No step-up in basis, erosion of values from taxes |
|
| Do you own vacation homes? | Possible forced sale to pay for estate taxes | |
| Do you own low-cost basis stock? | Can’t sell due to capital gains | |
| Do you own rental property? | Need liquidity to pay estate taxes | |
| Do you own assets from recent inheritance? | Need for tax planning, overall estate planning | |
| Are you making max annual exclusion gifts? | How to make additional transfers without incurring gift taxes | |
| Are you age 30-50, have a high income, and high net worth? | Need adequate retirement income, especially for the survivor; potential estate tax issues | |
| Are you a professional, age 50+? | Large percentage of net worth in qualified plans; continued deferral compounds problems | |
| Are you a professional, age 30-50? | Limited with qualified plans, need for sufficient retirement income | |
| Are you a high-income family head? | Need for family income protection; typically have group term protection only | |
| Are you a corp. executive, 55+ with high net worth? | Will never spend benefits from ER-sponsored non-qualified plan | |
| Are you a corp. executive, age 30-50? | Limited with 401(k), need for sufficient retirement income | |
| Are you a new entrepreneur? | Banks often require coverage on key person; buy-sell in process | |
| Do you have 401(k) and/or pension accounts? | Highly compensated execs in group are victims of reverse discrimination | |
Speak With a Trusted Advisor
Our team at Summit Financial looks forward to helping you. Our friendly advisor is available to review all your options at a time that is convenient for you.
