Many of the effective strategies that can be used today to transfer your wealth, reduce tax burdens and to arbitrage as asset into becoming a larger net asset to your heirs may involve the use of life insurance. Thankfully, the IRS has not attacked this financial vehicle yet if it is used properly.
When you think of life insurance, what may come to mind is protecting your family to be able to cover a mortgage or provide a college education if you should die too young. However, even though you may no longer worry about these things when you reach your 50's, 60's or 70's, there are many other applications of life insurance.
It is detrimental to assume you are not healthy enough, are too old, or that it would just be too costly. Insurance companies have realized that people are living longer, even without perfect health, and they have adjusted their mortality tables and premiums accordingly. You may find that it is not as expensive as you thought. In addition, a thorough audit of any existing policies as well as your investments, may uncover hidden equity that you did not realize you had. This can sometimes be used without inflicting and additional financial burden on your budget.
Acceptance also varies greatly among different carriers. For example, some may be more lenient towards diabetics, while others may be better suited for cancer survivors. Each company determines what their risk pool of insureds needs to be for them to be profitable. And you want the company to be able to pay the claim, right? So a profit margin is important, just like any other business. I think it is important to mention here that all insurance companies are required by law (in every state they do business in) to keep a certain amount of surplus and cash reserves. They are also highly regulated as to what they are even allowed to invest in to be sure they will be able to fulfill their promises.
You may want to allow us to do an independent audit of your current situation to see if there is a viable solution that you may be overlooking. As always, we are at your service.
"Lady Fi"
Kathy
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