Tools to help maximize client assets and minimize taxes
Whether your clients are in the accumulation, retirement or estate maximization phase of life, permanent, cash value life insurance can help them minimize taxes and maximize their assets.
Let our tools do the heavy lifting
LIFT shows clients how permanent life insurance can help protect their family, provide supplemental retirement income and efficiently pass on their estate.
Our signature LIFT strategy uses life insurance cash value to supplement retirement distributions, which can result in a lower effective tax rate in retirement. Our financial professional guide will show you how.
Additional consumer-focused materials and calculators will help clients take a tax efficient inventory of their assets, determine their retirement income gap and understand how the sequence of returns can impact their retirement assets.
Additional strategies to help lift the tax burden
With input from financial professionals like you, we’ve developed three additional sales strategies that can help clients:
- Pre-fund their retirement taxes
- Pass a tax efficient legacy to their children
- Pre-pay the taxes on their children’s inheritance
Pre-fund retirement taxes
The pre-funding retirement taxes strategy can help producers show clients how to use the cash value from a well-funded life insurance policy to pay the taxes on their retirement distributions later in life.
Ages: 35- 55
- Contributing to qualified plan, 401(k)
- Funds a life insurance policy; solving for distributions in retirement equal to the tax on retirement asset distributions
- Anticipates the need for the taxes that will be owed on retirement distributions
Consumer materials
- Consumer brochure
- Consumer presentation/webinar
- Seminar/webinar invitation template
- Run an illustration
(requires login)
Calculates an estimate of the taxes that would be owed on a retirement distribution, then solves for the funding needed to have those dollars available.
Create a tax efficient legacy
The tax efficient legacy allows clients to spend down their retirement assets – and use life insurance death benefit to transfer wealth to the next generation.
Ages: 60+
- Assumes no need for 401(k) distributions
- Does not need required minimum distributions in retirement
- Uses those distributions to fund a life insurance policy with heirs as beneficiaries
Consumer materials
- Consumer brochure
- Webinar invitation template
- Consumer presentation/webinar
- Run an illustration
(requires login)
Demonstrates using qualified plan distributions to fund a life insurance policy to transfer the value of that asset to the next generation.
Pre-pay beneficiary taxes
This strategy essentially lets your clients pre-pay the taxes on a qualified asset that will pass to their heirs.
Ages: 60+
- Wishes to pass their qualified assets to heirs
- Assumes no need for qualified plan dollars in retirement
- Intention is to bequeath those assets to heirs
- Funds a life insurance policy; solving for taxes owed on the inherited IRA
Consumer materials
- Consumer brochure
- Webinar invitation template
- Consumer presentation/webinar
- Run an illustration
(requires login)
Calculates an estimate of the taxes that would be owed on a retirement asset at the expected age of mortality then solves for the premium needed to fund a policy well enough that the death benefit is equal to that tax.
Please keep in mind that the primary reason to purchase a life insurance product is the death benefit.
Life insurance products contain charges, such as Cost of Insurance Charge, Cash Extra Charge, and Additional Agreements Charge (which we refer to as mortality charges), and Premium Charge, Monthly Policy Charge, Policy Issue Charge, Transaction Charge, Index Segment Charge, and Surrender Charge (which we refer to as expense charges). These charges may increase over time, and these policies may contain restrictions, such as surrender periods. Policyholders could lose money in these products.
Policy loans and withdrawals may create an adverse tax result in the event of lapse or policy surrender and will reduce both the surrender value and death benefit. Withdrawals may be subject to taxation within the first fifteen years of the contract. Clients should consult their tax advisor when considering taking a policy loan or withdrawal.
This material may contain a general analysis of federal tax issues. It is not intended for, nor can it be used by any taxpayer for the purpose of avoiding federal tax penalties. This information is provided to support the promotion or marketing of ideas that may benefit a taxpayer. Taxpayers should seek the advice of their own tax and legal advisors regarding any tax and legal issues applicable to their specific circumstances.
For financial professional use only. Not for use with the public. This material may not be reproduced in any form where it is accessible to the general public.
DOFU 2-2023
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