These assets are often held in low interest-earning accounts or vehicles, which may not be an efficient method of wealth transfer for the purpose of legacy building. These “legacy assets” may be leveraged into a greater benefit and a more efficient method of wealth transfer using life insurance. Let’s take a look at a typical profile:
- Is within the retirement ages of 55-75 and has a retirement plan in place
- Needs death benefit protection or may have an underperforming life insurance policy that needs to be reviewed
- Holds funds designated to leave to heirs or children savings vehicles such as savings accounts, or money market accounts, especially accounts designated as “payable/transfer on death” or POD/TOD
- Has titled assets jointly with heirs
- Has annuities coming out of surrender
- Currently takes required minimum distributions (RMDs), but doesn’t have a current need for the funds
Usually, there are two types of people - those fully committed to the strategy and those who are committed now but may want to change their strategy down the road.
- For the fully committed: Find a life insurance product that can provide maximum death benefit that meets their needs. Consider a guaranteed death benefit product.
- For those committed now, but who may want to change: Find a life insurance product that offers the opportunity to build cash value. The cash value may provide the client with alternative options, like using the potential cash value to help supplement retirement income.