Life Insurance and Creditor Protection - Customizable Client Presentation
The Concern
You may be concerned about growing and protecting your retirement savings, especially in light of the uncertain market conditions. The potential for creditors to reach your assets may also be a concern. You may want to address the following issues:
- The limitations placed on the amount you can contribute to your tax-deferred retirement plans such as a 401(k) plan or IRAs;
- The income taxes you will need to pay when taking distributions at retirement from these accounts;
- How much more savings you will need to account for the payment of income taxes; and
- Protecting your current assets from the claims of creditors
The Solution
Cash value life insurance can help provide the flexibility to protect your family during your working years, and your State’s creditor protection rules could help to maximize the benefits of life insurance:
- There is no limit on how much you can contribute to the policy;
- It can be used to supplement retirement income;
- In most cases there are no early withdrawal penalties1
- When structured properly, the distributions from the policy are not subject to income taxes;
- The policy may provide income protection;
- The cash value savings and/or death benefit may be protected from the claims of creditors, depending on the laws of your state; and
- To help with long term care expenses, a rider may be added to the policy contract to accelerate death benefits during lifetime.2
How It Works
Simply determine how much additional money you would like to save each year for your retirement. That amount can be based on:
- The projected shortfall in expected retirement income from your retirement accounts; or
- The projected income taxes you will need to pay on your existing retirement accounts.
You can then:
- Make annual contributions to a cash value life insurance policy;
- Take withdrawals and loans from the policy to supplement your retirement income;
- Add a long-term care rider to the policy to provide coverage in the event of future long-term care needs.
Continue reading to see the full sample client presentation. If you would like to use this type of presentation with a specific client, call our advanced markets experts today at (800) 936 - 0339 option 1.
