5 reasons why life insurance benefits your clients

By Karlan Tucker

Tucker Advisors

Here are five reasons why life insurance benefits your clients:

1. Living benefits

Life insurance death benefits can be unlocked by adding living benefit riders. Activate the death benefit for long-term care, chronic illness and even critical illness coverage. Don’t let your clients drain their savings and retirement accounts to pay for unexpected health changes. Leverage a life insurance policy to pay for care in a tax-efficient manner.

2. Cash value

Life insurance can help protect your clients' assets from creditors. With the ability to provide both tax-deferred growth and tax-free disbursements, life insurance can be the supplement that fits perfectly into your clients' retirement portfolios.

3. Business succession

Small business owners rarely have ready access to capital or a plan for succession. Life insurance can be used to bridge the gap between inadequate or illiquid capital and a comfortable retirement. It can also aid in providing a tax-break for the business and fund a retirement account for business owners.

4. Tax treatment

What will tax brackets look like in 10 years? What about 20 years from now? Take the guesswork out of at least a portion of your clients' portfolios. When designed correctly, a life insurance policy can be a great diversification to a portfolio. Being able to put money into a policy that will grow tax-deferred, and can still be accessed tax-free through policy loans, is an incredible provision that is permissible by the IRS. Take advantage of one of the few “tax-favored” vehicles left for consumers.

5. Death benefit

Provide a death benefit to beneficiaries. Whether used to mitigate estate taxes or make an estate whole, a tax-free death benefit can create a lasting legacy. Life insurance was formerly one-dimensional in that it only provided a death benefit. Now, with all of the features that can be added, there are many dimensions to what a life insurance policy can do for your client. However, life insurance policies still provide the basic necessity that they were designed for — a tax-free death benefit to heirs.