Depending on your situation the simple answer is… quite possibly.  In fact, single-premium universal life insurance, SPUL, may be one of the most overlooked, misunderstood life insurance products available today and rarely recommended by traditional life insurance agents. However, expert Tax-Free Retirement Specialists use this product frequently with their clients

Single Premium Universal Life is an immediate issue, universal life policy, which combines a death benefit with a savings account. It’s an easy and efficient way for consumers to purchase coverage and transfer wealth to the heirs — TAX-FREE.  Purchased with one single premium payment, this product is designed for people who value added security, flexibility, and cash value with lifetime coverage.

How do you fund a single premium life insurance policy?

One area where a significant amount of SPUL policies are being used is to consolidate stray life insurance policies with lots of cash value where the owner has no plans for the cash value.  By simply using the funds from those policies as a lump sum into a new single premium universal life insurance policy the new policy is usually larger than the sum of the smaller policies and is now paid in full.

Why use a Single Premium Life Insurance Policy?

The SPUL insurance policy can help clients meet a variety of financial objectives.

• Single-premium life policies require only minimal underwriting and are a good choice for the elderly or those with some health issues.
• Ownership of a life policy by the beneficiary or a trust can “remove” the asset from the estate for estate tax purposes.
• Advanced estate and legacy planning.
• Insuring a key employee or a business continuation plan.
• Policy loans from the cash value TAX-FREE
• Some SPUL’s will accept additional premiums if you believe you might want to deposit additional money later to increase your benefit.
• Provides a simple and efficient way to purchase coverage and transfer wealth tax-free. 
• Immediate issue policy purchased with a single payment. 
• Provides a policy with a death benefit much higher than the payment itself.

Single premium life insurance cash value increases much faster than a policy with monthly or annual premiums because it is funded with the entire lifetime premium at the issue of the policy.  Just like other insurance policies, upon the death of the insured the proceeds of the policy go to the beneficiaries free of federal income or estate taxes.

Can it be used as an alternative to an annuity?

The big advantage of SPUL is that it passes the death benefit to your heirs tax-free (although there may be estate taxes to consider).  In many cases, those benefits also will pass quicker to heirs outside of probate, a real plus for larger estates.

Because the annuity’s $150,000 growth was tax deferred the beneficiary will have to pay tax on $150,000.  Life insurance is always transferred tax-free with zero taxes due to the federal government.

Additional Benefits to the SPUL owner

Since an SPUL premium is paid in full at policy issue the policy is planned to last the owner’s entire life time.  The cost of the insurance of the policy will be paid from the cash value and any interest gain.  The only way that the policy will not last the entire lifetime is if the owner were to take out a tax-free loan from the policy for their use and not pay the loan back.  As long as the loan is repaid back into the policy, the insurance policy will continue to last the owner’s entire lifetime.

SPUL’s are the least understood life insurance product by traditional life insurance agents today.  By talking with an expert Tax-Free Retirement Specialist they can discuss your specific goals you are seeking to accomplish and assist you in determining if this is a the best product choice for you.  Click here to find a local Tax-Free Retirement Specialist in your area.

What is Life Insurance?

Life Insurance Calculator?

How to Use Life Insurance for Estate Planning

As Ben franklin said, “…in this world there is nothing certain but death and taxes.”  Life insurance can help you when both of those situations occur.  Obviously not the aspect of death, but it can definitely manage the tax aspect of his comment.

As humans, one of our primary failings is that we can’t see into the future and we limit ourselves to only thinking in the near term.  Today your family estate, farm, business or net assets may be well under the current threshold of having to pay estate taxes.  But what happens when (not if) the estate tax limits are changed in the future?  What happens 10-20 years or more from now when your net worth has grown so significantly that your heirs will need to pay estate taxes on their inheritance?  Will your current life insurance policy help them pay the federal tax due?

There is significant life insurance advanced planning strategies that a Retirement Life Solutions Specialist can create to protect your hard earned assets from significant taxation loss.  Universal life insurance policies are usually less expensive than whole life policies and can be created to provide enough life insurance benefit to cover any taxes that might be assessed.  But remember our human nature to be short-sighted?  Make sure you buy enough insurance to insure the growth of your estate into the future. 

The life insurance you buy today will be significantly less expensive than what you will pay for the same amount anytime in the future.  You aren’t getting any younger and you might develop health conditions that may increase the cost or prevent you from being insurable.  Seek out your Tax Free Retirement Planner for advanced strategies. They can create the tax-free life insurance plan and coordinate conversations between your legal representative and your tax planner to ensure your estate plan is maximized for your beneficiaries.  Click here to find an expert planner in your area.

What is Life Insurance?

Life Insurance Calculator?

So you’ve come to the realization that you need to buy life insurance.  You’ve read and educated yourself at www.lifeinsurancethinktank.com and have some basic ideas of what types to review with your Retirement Life Solutions Specialist.  Before you make that call, there is one more thing you might want to get together before you meet with them.  You’re going to want to have a basic understanding of how much life insurance you need to buy. 

There are many calculators on the web and they all require that you enter a lot of information.  Life Insurance Think Tank has put together a simple and effective Life Worksheet for you to gather that information onto so you can use the best life insurance calculator on the web to come up with a starting point.  More complicated situations such as businesses, land owners, high net-worth clients, estate planning etc… will always need the assistance of Retirement Life Solutions Specialist to help you create and use tax advantaged life insurance products. 

Click here to find a Retirement Life Solutions Specialist who is an expert at working with tax-free retirement products.

Download our Life Insurance Worksheet to begin your planning. 

Remember, your family is depending on you.

What is Life Insurance?

Life Insurance Calculator?

Remember… “You do it For Love”

Here are a few short videos that will bring a smile, laughter, and maybe a tear to your eye about some things you may not have thought about this year as you decide what to buy your loved ones for Valentine’s Day.

What would you do for love?

Bad Cupid

A Meaningful Gift

Crazy 4 Love

We’re glad we’re able to share these heartfelt images from The LIFE Foundation’s web site with you about this year’s Valentine’s Day gift.

Thinking of you always,

Your friends at www.lifeinsurancethinktank.com

What is Life Insurance?

Life Insurance Calculator?

Whole life insurance (WL) is permanent insurance and covers you as long as you live.  You pay the same premium for a specific period (usually the rest of your life) to receive the death benefit.  This type of insurance provides life insurance coverage and a savings feature.  

With whole life your insurance company puts part of your insurance money in a declared interest bearing account. With every premium payment your cash value increases. The savings element of your policy builds up cash value on a tax-deferred basis.  This cash value can be utilized in a few common ways.  You can borrow the cash TAX FREE or surrender it for cash.  If you surrender the policy you will pay tax on the interest gains that the cash value earned over the years.

Whole life can be participating or not.  If it is participating, you get to participate in the surplus of your insurance company’s excess earnings and receive dividends annually.   You have the choice to either receive your dividends in cash or let them accumulate interest.  You may also use your dividends to reduce your policy’s premiums or buy additional insurance coverage.  Talk with a Retirement Life Solutions Specialist before buying a whole life policy from an insurance company because dividends are not always guaranteed.

Universal Life Insurance

Universal life insurance (UL) is also called “flexible premium adjustable life insurance,” because it offers more flexibility compared to whole life insurance. You have the option to reduce or increase your death benefit and also pay your premiums at any time and in any amount (subject to certain limits) after your first premium payment has been made.

With many companies you can purchase an increased death benefit periodically without having to undergo medical underwriting.  This can be advantageous as someone becomes older and begins experiencing medical problems.  

Some companies will allow two options to the death benefit – a fixed amount of death benefit or an increasing death benefit equal to the face value of your policy, plus your cash value amount. Most times however, the death benefit does not increase and the cash value is there and grow to be used by the policy owner (hopefully they know they can use this money since it is their money).

You also have the opportunity to change the amount and frequency of premium payments. So, you can increase your premiums to increase your cash value or may also even add a lump sum according to the specified limit in the policy. As you know, part of your premium is put into an investment account and the interest therein is credited to your account. In this way, the interest grows on a tax-deferred basis, which increases your cash value.

In case of a financial challenge, if there is enough cash value accrued, you can reduce or stop your premiums and use your cash value to pay premiums.  Make sure to discuss the status of your cash value fund with your Retirement Life Solutions Specialist before stopping the premiums. Your policy may lapse if you cease to pay premiums and have insufficient cash value to cover the cost of insurance.

The downside of a universal life insurance can be the interest rate.  If the policy performs well, there are chances of potential growth in the savings fund.  On the other hand, if interest rates are low over a period of years, then the estimated annual returns are not earned.  

A recent addition to universal life market is called Indexed universal life.  In this type of policy instead of a fixed interest rate from year to year; your cash values earned interest is tied to a stock index such as the S&P 500.  The performance works exactly like that of a fixed indexed annuity.  If the index goes up during the period, you will get all of the gains up to a maximum CAP in place that year.  If the stock index falls negative or is flat, you will receive no interest performance that year.  While this may seem risky, your cash is not invested in the stock market.  It is just using the stock market index as a means to credit interest to your cash value.  Reviewing the historical performance of the S&P 500, you could have made more interest performance in 10, 20, or 30 year periods than if you had been in the fixed interest account of a universal life policy. 

Universal life insurance offers all-round protection to your loved ones, thanks to its security, flexibility and variety of index crediting choices options.  In times of low financial liquidity, you can alter your premium payments or may even withdraw from your cash value fund. In addition, you can increase or decrease the face value of your insurance to an extent if needed.

Universal or Whole Life?

When buying any life insurance policy, you need to focus on the needs of your family in the future. Permanent life insurance is designed to give you and your family lifelong security.  Whole life insurance protects your beneficiaries in your absence and acts as an asset-accumulating tool.  Universal life insurance gives you the chance to regulate your insurance premiums to keep current with your financial situations. Universal Life also gives you more control of your earnings because of the crediting strategies that can be changed at any time during the year.  Your Retirement Life Solutions Specialist can provide you the education and knowledge about all life insurance products available today. Take the time to learn from their expertise before you decide what your family needs.

What is Life Insurance?

Life Insurance Calculator?

But what if that didn’t happen tomorrow?  What if you died tonight and were no longer around to provide all those things that you’ve been doing for your loved ones? What if you were a single parent, now who would be providing for that loved ones left behind?  Without your income and all the other things you provide, would they be able to maintain the comfortable and special family lifestyle and togetherness that you were able to provide for them?

That’s where life insurance helps you help your family.  It can’t put your loved one’s life back the way it was, but it can make sure they have the world they’ve always known.  So if you think you need life insurance (or need more than you have), do something about it today.  Your family is counting on you.

With Valentine’s Day next week, besides bringing home that romantic gift to surprise your loved one.  Do something permanent for them.  Buy them a life insurance policy to protect them in case you aren’t around to.  Talk to your Retirement Life Solutions Specialist today to determine the best insurance for your family.

What is Life Insurance?

Life Insurance Calculator

This is something that everyone here at Life Insurance Think Tank has a strong desire to educate consumers about.  If set up the correctly, permanent life insurance can be more than just life insurance.  Talk with your Retirement Life Solutions Specialist about your specific situation.

Click here to read his complete article

What is Life Insurance?

Cost of Life Insurance?

An IUL provides the value of a permanent life insurance with the cash value of the policy invested into an account that is “linked” to the performance of a market index like the S&P 500. The value to the insured by linking to the index is exactly like a Fixed Indexed Annuity…in a positive year the account can earn some of the gains of the market-linked index and in a negative year none of the losses. In addition, this cash value account has other benefits including a minimum guarantee on performance and tax advantages.

The IUL cash value can never lose money due to the market-index having a down or flat year. The insurance company guarantees your account value every year and locks in the previous year’s earnings. During the next year, the account value and earnings posted to your account are locked in until the next anniversary date of the policy. At that point if the market has grown from the previous year, then a percentage of the growth is applied to the account value. If the market has fallen, there is no change to the previous years locked in account value.

The cash value and the earnings of an IUL grow tax deferred like a qualified retirement plan (IRA and 401K). This means your account actually benefits from triple compounding earnings… you earn interest on your account principle, you earn interest on your interest, and you earn interest on the money you aren’t paying in taxes on your interest earned.

This money is your money for use at the time you decide to use it; for your children’s college education, purchases, and even retirement income – TAX FREE. Seek out your local Retirement Life Solutions Specialist to determine if an Indexed Universal Life Insurance policy may be an benefit to your family’s protection and an addition to your retirement portfolio.

What is Life Insurance?

Cost of Life Insurance?

Permanent life Insurance, like medicine and technology, has evolved to the extent that it hardly resembles what it looked like just a decade ago. The basics have remained the same, a death benefit, premiums, and an inside cash value that accumulates over time.

What has dramatically changed is the way in which cash values earn returns. The latest generation of “index linked” policies combines the security of guaranteed cash values with interest linked to a stock market index. Let’s revisit the changes that have occurred over the past decade.

The history of the change goes back into the mid 1990’s in the annuity industry. Prior to this time, investors interested in tax deferred annuities had two choices available. Fixed annuities offered a guaranteed principal with interest rates determined by the insurance companies. Variable annuities used market based sub accounts, similar to mutual funds which offered higher growth potential but no guarantees to the principal.

Evolution of Life Insurance

•  Term Life

•  Whole Life

•  Universal Life

•  Variable Universal Life

•  Fixed Indexed Universal Life (FIUL / IUL)

The first Fixed Indexed Annuities (FIA) offered principal guarantees like fixed annuities while the return was tied to a market index like the S&P 500 or the Dow. The expectation was that over time, the indexed linked returns would outperform fixed rate annuities with no risk to losing principal.

The history of cash value life insurance policies has been quite similar to that of annuities. The original form of whole life insurance offered fixed premiums and guaranteed cash values which grew over time. In the 1980’s variable universal life policies were introduced that tied the growth of the cash values to mutual fund based sub accounts. Returns were potentially higher but without any guarantee of principal. However, market downturns caused investors to be wary of losing the cash values of life insurance as this could put the death benefit at risk.

Like the evolving of the Fixed Indexed Annuity, Indexed Universal Life (IUL) offers unique advantages to the policyholder. Premiums are flexible which allow investors to increase deposits into the cash value side without increasing death benefits. Sophisticated market indexes credit higher returns than similar equity indexed annuities. Principal guarantees offer protection against market losses. Truly, this “state of the art” innovation has made life insurance a legacy planning vehicle never seen before.

Find all of this a bit confusing? That’s where an experienced professional can help you sort through all the complexity and guide you. Talk with your local Retirement Life Solutions Specialist.  Make sure you ask lots of questions to learn both the pros and cons of any policy you are considering.

What is Life Insurance?

Cost of Life Insurance?

We recently came across a great blog on the subject from one of our sister sites that we had to share.  The article came from Annuity Think Tank and the title was “FIUL Power Phrases for Your Certain 2013 Sales Success“.  Check out the full article below.

Fixed Indexed Universal Life (FIUL) has been one of the fastest growing products in 2012 and shows no signs of letting up in 2013 as savers and investors increasingly look at Life Insurance as a separate asset class in a zero rate world and where tax rates are cratering at their last gasp of all -time lows as well.

Here are some power phrases to get prospects pumped and primed to think about seeing fixed indexed life as an alternative to an overbought bond market and most of all a solution to wealth transfer or basic protection to ensure the lives and legacies of loved ones. This is where the discussion should start.

At retirement would you rather have a lifetime income stream that you can control that may be tax free or an uncertain income stream that you can’t control and is fully taxable?

If you could control potential 25% losses for the next 25 years (the median tax rate for a middle class American at age 60 for 25 years-source IRS) how much of your safe funds could you use to avert this large loss of your family’s legacy?

In the future do you think with the looming fiscal cliff that taxes will go up or down? If up, would you rather pay taxes now, later or never in protecting your loved ones and if funded properly provide a lifetime tax advantaged income for life.

If you could buy a AA rated insured tax free bond which are hard to find these days that pays 4% tax free interest which is even harder to find (price would vary by age and a municipal bond is a security product whereas a FIUL is a Life product) and pay 60 cents on the dollar and get back one dollar tax free rather than having to pay capital gains taxes like the bond, how many of these bonds would you buy $100,000 or $200,000.

Unless, rates change, like VUL and its predecessor UL, millions of these FIUL policies will suffer a similar fate and implode. Do not leave the funding of this great alternative to luck. Many FIUL advisers cross-sell both FIUL and FIA. The acronym F-I-A is a great way to remember how to offer Fixed Indexed Universal Life or its cousin, VUL and UL properly to ensure maximum performance.

Fund it right –Not at target-relying on those 8% net illustrations based on pie-in the sky market performance is like the luck of getting a paper cut opening a get well card. Don’t get into an illustration battle.

Illustrate it right- Most FIUL illustrations carry the 1990’s historical numbers which was the second greatest bull market in history and since it occurred at the beginning of illustration provides a positive sequence of returns and unrealistic outcome. Use Monte Carlo or back testing software to demonstrate random returns which are more realistic. I see the results of a 30 year bull market for bonds being used showing a drop in rates from 14% Treasuries to 1.70%. Witnessing another bond market rally like the last 30 years is about a likely as surviving a cordless bungee jump fall.

Allocate it right-Even though an FIUL is just a wrap around an FIA and crediting methods are designed to produce similar returns, the difference between the NASDAQ and S&P 500 over the years can be in the tens of thousands of dollars in cash value and income over time. Use blended indices including hard assets like Gold to provide optimal return with less risk.

Life Insurance illustrations are like marriage, you learn to pay-either attention or dearly. Through paying attention to these power phrases and suitability points, FIUL can be a potent and powerful tool for lifetime legacies of lifetime income and protection.

Life Insurance Education