Bell & Associates | Life Insurance Specialists
800.308.BELL
02/02/2012
Planning Opportunity for Non-Children Beneficiaries
Do you have any clients who have emphatically told you “We’ve given our children plenty over the years, I’m not motivated to leave them anymore!”? We hear this more often than most would imagine. However, as a financial advisor, this doesn’t have to mean that life insurance has no role for your client with this mentality. Deep down inside, most all of your clients want to make a positive difference in other people’s lives now and into the future.
Consider appealing to their emotional side by helping them choose a specific organization that has made a difference in their lives. With your client’s help, those organizations can continue making a difference in future lives as well. All it takes is them naming a charity, foundation, college, religious organization, or other non-profit entity as the “non-spouse beneficiary” of the asset. If the asset is Qualified/IRA money, it even avoids estate taxes and income taxes at death. Then use the client’s RMD’s to fund a complementary life insurance policy alongside the Qualified/IRA asset to supercharge the future donation to the beneficiary of choice with an additional leveraged up lump sum death benefit.
For example, you have a 75 yr old couple with $200k each in 2 IRA accounts who recently lost a dear friend to a battle with cancer. Their RMD’s are about $17,000/yr. After 25% tax they have about $13,000 to fund a joint-life insurance policy with a fully guaranteed Death Benefit of $518,000. Assuming their IRAs net a 5% growth rate, they will be able to give an income and estate tax free gift to the American Cancer Society of approximately $1,000,000 at their death. A phenomenal legacy will be left in their honor to help fight a cure for cancer.
By helping your client, help a charitable cause such as the American Cancer Society, and providing a fully guaranteed life insurance policy, you as the advisor make a nice sale of nearly $13,000 of commission. Incorporate this line of thinking into your practice and let Bell & Associates guide you through the process every step of the way.
Consider appealing to their emotional side by helping them choose a specific organization that has made a difference in their lives. With your client’s help, those organizations can continue making a difference in future lives as well. All it takes is them naming a charity, foundation, college, religious organization, or other non-profit entity as the “non-spouse beneficiary” of the asset. If the asset is Qualified/IRA money, it even avoids estate taxes and income taxes at death. Then use the client’s RMD’s to fund a complementary life insurance policy alongside the Qualified/IRA asset to supercharge the future donation to the beneficiary of choice with an additional leveraged up lump sum death benefit.
For example, you have a 75 yr old couple with $200k each in 2 IRA accounts who recently lost a dear friend to a battle with cancer. Their RMD’s are about $17,000/yr. After 25% tax they have about $13,000 to fund a joint-life insurance policy with a fully guaranteed Death Benefit of $518,000. Assuming their IRAs net a 5% growth rate, they will be able to give an income and estate tax free gift to the American Cancer Society of approximately $1,000,000 at their death. A phenomenal legacy will be left in their honor to help fight a cure for cancer.
By helping your client, help a charitable cause such as the American Cancer Society, and providing a fully guaranteed life insurance policy, you as the advisor make a nice sale of nearly $13,000 of commission. Incorporate this line of thinking into your practice and let Bell & Associates guide you through the process every step of the way.
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