I partner with a number of financial planners, and the planners with whom I have the best connection, typically have a balanced approach regarding insurance.
Here are what three financial planners have shared about their experience with permanent life insurance.
Which approach is the best fit for you?!?
Financial Planner 1: owns a permanent life insurance policy from their first job in financial planning. They maintain the policy and talk about non-qualified retirement savings vehicles like permanent life insurance with new clients as part of a diversified portfolio.
Financial Planner 2: owns a fully funded (maximum tax benefit) permanent life insurance policy; they borrowed against the cash value to buy their first private company, repaid the loan, then years later borrowed against the cash value again to buy a vacation home. Today they recommend mostly term life insurance to clients.
Financial Planner 3: doesn’t recommend a traditional, permanent life insurance policy to clients; however the planner is pleased when they see a new client has an existing permanent life policy sold previously by another adviser. If the policy has done what it was intended, it built cash value; they want to exchange this existing policy for a new paid up permanent life insurance policy with long term care benefits.
The new policy will have a higher cost of insurance since the client is older, and the policy no longer meets the potential client objective of creating additional non-taxable retirement income. The new plan would, however, include long term care benefits, and the tax-free life insurance exchange could allow an efficient way to gain access to a highly appreciated asset.
Still, the benefit was in having properly funded a permanent life insurance policy in the building years – ages 35 to 50.
All three of these financial planners hope you have a permanent life insurance plan in your portfolio; the question is whether you’re talking to a life insurance agent who can help design the right plan with you.
David Hillelsohn founded DHill Financial, LLC with the mission of enhancing the cohesion among families and businesses by prioritizing meeting obligations and taking steps to ensure people know you care. David is an independent insurance agent licensed in the majority states around the country, and he can be reached at 703.435.6028 or by email at firstname.lastname@example.org. This article is not meant to be tax advice, please consult a tax professional for details.