A Predictable Asset

Life Insurance as an asset class is a concept that is gaining traction and there is a very good reason why. Most investment portfolios are designed to help clients accumulate wealth. While accumulation is an important part of an investment strategy, if the client plans on transferring wealth to the next generation, they also need to consider ways to protect their assets. An untimely market loss can significantly impact an asset’s value and can result in a client leaving behind much less than intended. Life insurance, unlike any other asset, can add stability to your portfolio by providing a predictable amount of money that can be left for a client’s heirs.

Here is a snapshot of how the concept can work for you. Your client continues to maintain their current investment portfolio. In addition, that client takes money that is not earmarked for another purpose (ie a Legacy asset) and uses it to pay the premiums on a life insurance policy. At the time of your client’s death, the beneficiary receives the death benefit and can use the funds for any reason, including to catch up on market losses, compensate for lost income or to avoid having to sell off assets to pay estate settlement costs.

Advantages of the Concept

  • Your client has peace of mind knowing that the life policy can provide their heirs with an expected benefit that does not fluctuate based on market performance.
  • Because the value is predetermined, the proceeds can be easily divided among the heirs.
  • A properly structured policy can avoid income and estate taxes.
  • The internal rate of return on the death benefit can be significant, and is even greater when the tax advantages are factored in.

We have software that can help you explain the process. Life insurance can be the final piece of the planning puzzle. An asset that can be designed to provide guaranteed and predictable results. Life Insurance can allow your clients the peace of mind to invest in the market with the knowledge that market fluctuations will not effect their heirs.


About Jeffrey Berson

40 years in and around the industry has made Insurance a part of my DNA. I have had the pleasure of working with and for some of the greatest minds in our industry. My "Bersonal" View is an attempt to capture some of the best ideas, the best concepts and the best practices in a way that can lead to success for others. It will certainly be my point of view, so please...don't take it "Bersonal".
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