Suppose you are a 65 year old man and you would like to make sure your wife will have at least $1,000,000 to live on and give to your children upon your death. An extremely inefficient way to do this would be to hold the money in CD's or investments. The best way to pass 1 milliion dollars tax free to your beneficiaries is through a permanent life insurance contract and possibly a Life Insurance Trust. For this article let's just look at how the life insurance numbers break down:
Assuming you are 65, average health, and wanting to pass on 1 million tax free to heirs, here's the true cost. Hint: It's much less than 1 million dollars
Shopping multiple A rated companies, the least expensive monthly payment is $1825 or 21,000 annually (The cost is guaranteed NOT to go up for life and could be lower depending on your health). Seems expensive right? Well, it's much less expensive than having to hold 1 million in reserve until your death. her's why...
You can automatically fund the life insurance with only $287,000. This would pay your premium for the rest of your life guaranteed. The rest of the money is free to be used for any reason you desire. You can spend it down to nothing while you are still alive and you'll always know your heirs will get 1 million dollars.
I know some of you are wondering how good of an investment this really is...it's easy to figure out. All you have to do is pick what year you will die (I know some don't know the date but that's okay. We can figure it out at any age)
If you pass away at...70 = 87.6% return, 75 = 27% return, 80 = 13% return, 85 = 8.5% return, 90 = 6.2% return, 95 = 4.86% return. (No market volitility, and again, the nnumbers may even be better if you health is better than normal.)
Find out how these numbers can work for you. We will do a free quote based on your age, health, and desired coverage. On our home page click on our "Financial Second Opinion" button and you'll get your report within 24 hours.