What is the one benefit you could be missing out on in your retirement planning toolbox?

When it comes to retirement planning, most of us have a wide variety of goals that extend far beyond simply securing a monthly income stream in retirement, which means that standard annuity and many life insurance products may fall short.

Specifically, many of us are concerned about providing for our loved ones and other beneficiaries while also maintaining access to our savings during retirement, so that the surrender charges and tax consequences associated with a traditional annuity can make the products unappealing.

That is why a single premium life Insurance policy gives your estate planning an edge. Most people are familiar with paying regular monthly premiums for life insurance whether it is term or a permanent policy.

What makes this type of policy so appealing is the fact that you are “one and done.” This can be important because as we get older and budgeting becomes more difficult to keep paying premiums for the rest of your life to avoid a policy lapse.

With one cash payment your single premium whole life Insurance policy is fully funded from day one. No budgeting, planning, or fretting about your future ability to pay monthly premiums. Zero risk of ever defaulting on your life insurance.

Here is why a Single Premium Life Insurance Policy is so appealing:

Now you have “New Living Benefits” throughout your life

• Excellent alternative than buying a Stand--Alone Long-Term policy. As you know, with stand alone LTC policy, if you never use the LTC policy, you get nothing back.

• Have access to 75% of your death benefit with a qualifying event while you are living.

• Access to 75% of the death benefit for a Terminal Illness, a Chronic Illness (Dementia or Alzheimer’s Disease) and for a stroke or life-threatening cancer.

• Protects your other assets from having to be used. This policy is specifically designed to help provide financial relief during a financial crisis because of a serious illness.

• Your beneficiaries achieve death benefits in much more significant face amounts compared to the original amount of money invested.

• Money in the estate is not subject to Probate.

• You can get your money back if your needs change for a complete Peace of Mind.

• Your money inside the policy can never lose money.

• Cash Value in your policy grows at 3.45% compounded interest

Why people are considering a Single Premium Life Insurance Policy:

• Those who have specifically earmarked funds from CDs, Passport Savings or Money Market Accounts to pass on to their heirs or charity, because SPLs are not subject to annual taxation, which would otherwise reduce the total growth.

• Those who may build up cash value in their insurance polices and wish to enhance their legacy by re-positioning or swapping the cash value into a Single Premium Whole Life Policy.

• Those nearing retirement or who have retired and have a lump sum of money not earning much money.

• Those who may have a need for additional insurance.

• Those who may have received an inheritance.

• Those who may have sold their share of the business.

• Those who have a specific need in mind, perhaps for a family member with special needs.

• Those who want to avoid monthly premiums and want faster growth.

Here is an example of what a Single Premium Whole Life Insurance Policy might look at. We will take Bill and Mary who have 3 grandchildren and have a $100,000 in CDs set aside for them. 10 years later, both Bill and Mary both have passed. The CDs have now grown to $110,462 at an interest rate of 1%. By simply transferring money that is currently in a CD, Money Market Account, Savings Account or Cash Value from an existing Life Insurance policy into a Single Premium Life Insurance policy, look what happens: (see Figure A page 13)

 Single Premium Life Insurance Policy
  PolicyCDs 
Amount Invested  $100,000 $100,000
 Interest rate 3.45% 1%
 @10 years of growth(cash value) $123,468 $110,462
 Death Benefit $207,490 $110,462
 Divided by 3 grandchildren $69,160 $36,820
 Accelerated Benefits(long term care/terminal or chronic illness $194,990 ZERO
 Taxes Zero $1,500-$2,000

How much money do I need to transfer into a Single Premium Life Insurance Policy from a CD, Money Market Account, Savings Account or Cash Value from an existing life insurance policy?

You can transfer as little as $12,000 to start a policy. The size of the death benefit amount depends on several things, a person’s age, smoker or non-smoker, how much money you transfer and your health, since it is life insurance. Another example: A 50-year old male might transfer $100,000 into a policy and receive immediately $400,000 on a tax- free death benefit, whereas, a 60- year-old female might transfer $25,000, giving her a $50,000 in a tax free death benefit.

There are too many good reasons not to consider a single premium policy. To find out more about a single premium life insurance policy, call Robert Whiddon at 901.331.4177 or bobwhiddon@bellsouth.net. Whiddon is a specialist in helping those who will be retiring or have retired with solutions for smooth sailing in retirement. He has written several articles for The Best Times and The Memphis Business Journal.

Here are two websites that might be helpful: Youtube-savingsbasedinsurance and www.savingsbasedinsurance.com.

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