FARMINGTON HILLS, MI / ACCESSWIRE / November 21, 2016 / According to Scott Briggs of Retirement Planning Solutions of Michigan, the idea of leveraging one’s assets and maximizing one’s estate with life insurance is a well-known concept used by many retirees for decades. “If done properly, this concept can be the most significant estate planning tool to own within a portfolio of investments.”
Briggs noted that, “There is a new type of life insurance policy gaining popularity in recent years that provides ‘living benefits’ or ‘accelerated benefits’. It is often referred to as hybrid life insurance because the insured doesn’t have to die to take advantage of the policy’s death benefit.”
How it works – the insured’s amount of death benefit is determined by the amount of the one-time deposit, age, gender, and health. Often that single deposit can be multiplied by two or more when determining the policies guaranteed death benefit. This means for a person with average health, commonly a non-smoking female that contributes $100,000 could realistically recognize an immediate $200,000 tax-free death benefit.
In the prior example, the death benefit can be provided to the heirs of their estate probate free as assigned beneficiaries to the policy, allowing the insured to transfer her wealth tax-free and increase the amount her beneficiaries will inherit. Many insurance companies that specialize in this concept provide the option to accelerate the policies death benefit to be used for chronic illness and long-term care expenses.
For the person with bank savings accounts, CDs, money market accounts, brokerage accounts, and even annuities that like the idea of being able to always have access to their money, some of these hybrid policies guarantee 100% return of premium, other policies allow withdrawals of the policies cash value. Many have growth based on either fixed rates of interest or an indexed rate of interest, that can be substantially better than a savings account, CD, or an annuity. For many people, the added benefits make hybrid life insurance an attractive alternative to cash in the bank.
Scott Briggs of Retirement Planning Solutions of Michigan says, “For people over the age of 65, the common misconception is that the required underwriting process is burdensome and requires perfect health to qualify. This is simply not the case, simplified underwriting makes getting qualified…simple.” No medical exam or blood test are needed. Advanced underwriting process and technology adopted by insurance carriers expedites approval and only requires a few medical questions to be answered along with a brief telephone interview.
Hybrid life insurance can be a valuable planning tool with favorable tax benefits and guarantees. With every type of investment, Briggs says there are pros and cons, and it’s important to work with a competent professional with the knowledge and experience to help make an educated decision about this unique estate planning tool. Those interested in learning more about hybrid life insurance can visit the official website of Retirement Planning Solutions of Michigan at www.rpsmich.com.