May 2021 Issue: Rethinking Life Insurance at all Levels of Net Worth-Rethinking Life Insurance at all Levels of Net Worth by Rob Barnes

Rethinking Life Insurance at all Levels of Net Worth by Rob Barnes

Pdf Summary

The life insurance industry is evolving to offer benefits that clients can access while alive, known as "living benefits." These living benefits, particularly chronic illness benefits, are becoming more popular and are causing advisors to reconsider the value of life insurance for clients at all stages of life and different levels of wealth. For low-net-worth clients, life insurance can serve as a disciplined savings tool to ensure a comfortable retirement. The cash value can be annuitized to provide tax-advantaged income on top of Social Security benefits, and the death benefit can offset the loss of Social Security benefits or cover final expenses. Mid-net-worth clients may benefit from permanent life insurance with a chronic illness or long-term care rider to provide financial safety and flexibility during retirement. High-net-worth clients can also find value in life insurance as it can create liquidity to pay taxes on qualified money, equalize estates, and serve as an investment alternative with tax-deferred growth and protection from creditors. It is important for advisors to consider customized coverage options from higher-end insurance agencies for clients with higher incomes and net worth. By helping clients identify areas of risk and providing comprehensive insurance coverage, advisors can add significant value to their client relationships and protect their assets.

Keywords

living benefits

chronic illness benefits

low-net-worth clients

tax-advantaged income

permanent life insurance

long-term care rider

high-net-worth clients

liquidity to pay taxes

investment alternative

comprehensive insurance coverage