A Unique Approach to Life Insurance
At Aware, we see life insurance as a tool to provide cash at a death. It is not an alternative investment to accumulate cash value. Some policies
do have cash values but the rate of return on the premiums to the cash value is almost always poor. In contrast, the rate of return on premiums to
the death benefit is usually very good. We see life insurance simply as a financial tool. If it makes financial sense for you, we recommend it. If it does not
make sense financially, we will not recommend life insurance.
If we do recommend life insurance:
1. It needs to be the correct type of insurance.
2. The premium amount and duration must be considered.
3. The ownership and beneficiary needs to structured to mesh with your estate plan and maximize the tax benefits.
Type of Insurance
At Aware, we recommend life insurance to provide needed cash when a key person, whether in a business or a family, passes away. While many
life insurance policies build cash values, the cash value is only a consequense of the particular policy design to keep the premiums
affordable as the insured grows old. The cash value alone is never a legitmate reason to buy life insurance. What is most important is
that the death benefit will be paid when it is needed. We will make sure that you have a policy that pays regardless of interest rates
or the insurance company's financial or mortality performance.
Funding the Policy
We will design the policy around your gifting limits and available cash flow.
Structuring the Ownership and Beneficiary
We don't want to have the solution to become part of the problem by increasing the size of your estate and causing more tax. Often
an Irrevocable Life Insurance Trust will be utilized to keep the life
insurance out of the taxable estate.
|"You have to care about someone to want to buy life insurance."