During the last week we have worked on dozens of life, long term care, disability and annuity cases working alongside our Advisers.
CASE 1
2 individuals (business partners) wanted to purchase a home together at 50/50 ownership and pay cash to be able to compete in today’s rising real estate market. One will live in the home and improve the property being responsible for taxes, insurance and improvement costs since he will have no rent. Their exit arrangement is that, in no longer than 5 years, the one living in the property will agree to sell and split the proceeds or refinance and return to his financing partner 50% of the home value at time of refinance or sale. The parties agreed to buy 10 year term insurance on each other to have cash available to buy out their partners 50% and not be forced to sell the property or be in business with the deceased estate (family). Once the exit happens, the term insurance will be cancelled.
This strategy can be applied in many business situations.
CASE 2
Client wanted to research options for building a tax free legacy using life insurance and reached out to their financial advisor for guidance.
NOTE: Do 100% of your clients know that you handle life, long term care and disability insurance?
This client was age 59 and in good health today but did not have longevity in his family.
$100,000 death benefit illustrated the concept: We solved for an increasing death benefit over 20 years of payments, then level death benefit. The premium was $6,912 annually ($138,240 over 20 years). This was guaranteed universal life insurance to age 120. Worst case would be $157,072 death benefit for life. At a conservative 3.75% estimated rate of return, the client would have a tax free death benefit of over $250,000 at age 80. The expected Guaranteed IRR at death for various ages are:
Age 70 17.29%
Age 75 11.25%
Age 80 7.05%
Age 85 5.14%
Age 90 4.03%
The numbers would work the same for larger cases. Give your clients a guaranteed legacy and they might not worry as much about living the life they want on the assets you manage.
Contact me about a case today.
Email: Tim Morton, CEO
(800)238-8144 x127
If you are not discussing these types of cases with your clients, then who will?
Westland is here to help you protect your clients, their families, their businesses and their portfolio.
Call for assistance with any LTC, Annuity, DI or Life case today.