Wealthy People Own Jumbo Life Insurance Policies.

Most wealthy people want to preserve and protect their assets from additional government taxation when they are transferred to their heirs. High net worth people own large amounts of life insurance to create guaranteed, low cost liquidity to minimize the impact of estate taxes. Jumbo life insurance coverage, often financed, is a critical element in state-of-the-art succession planning.

Wealthy people pay many types of taxes while they are accumulating their wealth. Sure, we’ve all heard the stories about Amazon’s Jeff Bezos or Facebook’s Mark Zuckerberg paying virtually no taxes. True or not, most high net worth people know they’ll pay an additional 50% in estate tax. Minimizing the burden of taxation on transferred wealth is sensible planning.

For these reasons, properly structured permanent life insurance is a necessary part of sophisticated estate planning strategies. To support and enhance these planning techniques, life insurance guarantees that liquidity is available upon death. Highly regarded income and estate planning attorneys are among the biggest proponents of life insurance because it creates the immediate liquidity which binds these intricate plans. The life insurance proceeds are there when wealth is transferred and the estate taxes are due.

Use your existing wealth to make it immune from unnecessary taxation and risks.

The cost of using jumbo life insurance policies is reasonable and it is very important to understand how the jumbo life insurance definition affects pricing. For example, a couple in their 50’s can purchase $10,000,000 of permanent insurance for $50,000 annually. The cost of life insurance is a fraction of the return generated by the death benefit. As people become more wealthy, it is even more difficult, without insurance, to successfully protect the majority of their assets from estate, gift and inheritance taxation.

The combination of cutting edge estate planning strategies with permanent life insurance coverage is state-of-the-art succession planning.

Once the decision to own jumbo life insurance coverage has been made, the question of how to best pay for the insurance is evaluated. This is an issue that is dependent upon many factors and why customization is always best. Should the premiums be accelerated? Should the coverage be whole life or indexed universal life? Does premium financing make sense?

Borrowing the Premiums to Pay For the Life Insurance Policy.

Premium Financing:

• Borrowing the premiums from a bank can be an optimal way to fund permanent life insurance while offering great flexibility in the future.
• Uses well managed loans to drive down out of pocket costs.
• Non recourse design requires minimal collateral other than the life insurance policy.
• Results in fully funded policies with many options to pay off the loan (always dependent on projections).
• Minimizes out of pocket costs in all years until the anticipated exit strategies pays off the loan.

Work With Me To Help You Structure The Right Policy.

For 30+ years, I have been working with individuals, families and businesses facing many of these issues. Typically, my clients work with cutting edge professionals. Whether it be estate planning attorneys, CPAs and wealth managers, my clients are people who appreciate expertise and professionals who bring great value from their respective fields. I have helped my clients acquire more than $1B of permanent life insurance coverage and I have placed policies in excess of $50M. I work with my clients to create value in many ways.

One way is to reduce the amount of compensation built into the policy. Driving down the commissions in jumbe life insurance policies has a direct correlation to better policy performance. Further, I use my experience in this market to help ascertain the best underwriting offers possible. This requires extensive underwriting knowledge to help insurance company underwriters properly evaluate an applicant’s medical history without increasing the rates.

Testimonial:

“After spending several years working with top tier estate and tax advisors to put a succession plan in place, our counsel put us in touch with Ted Bernstein for the purpose of getting life insurance. I can’t say it any simpler than by saying, after working with Ted, I became aware that there is a real difference between insurance people. Ted is approachable and good at making insurance relatable.” Jake Garlick, Virginia

Please contact me at 561–869–4500 or email me. I offer a complimentary consultation to discuss anything you wish about life insurance or annuities. I am proud of the things many clients have chosen to say about us and perhaps they will give you additional insight about how we do business.

Originally published at Life Cycle Financial Planners, LLC.