The following are 20 Reasons why Permanent Life Insurance is better than Term. From a publication by Crump Life Insurance Services, Inc. Copyright 2011.
1) To insure you have life insurance in place when you die- This means there definately will be resources available for your family. 98% of Term is not in force when its needed. People live through the term, cancel it when times are tough or let it lapse.
2) To insure your survivors can pay your final expenses- to give your family time to grieve, without having to sell assets or spend down bank accounts.
3) To insure your family can pay off a Mortgage-If your home has a mortgage, this relieves your family of that concern
4) To support Children with special needs- supporting children with special needs does not end with your lifetime, it lasts for theirs.
5) To equalize an estate, a business owner may want to leave the business to a child/employee and this will help equalize the inheritance amongst all the children
6) To maximize a Pension- having Life Insurnce in place allows a retiree to max out their Pension, and still have resources available for the surviving spouse.
7) To replace Social Securityat Death- these benefits do not pass onto the decendants surviving children, and Life Insurance can ease that potential loss.
8) To provide creditor protection- Some state statutes protect policy cash values from the claims of creditors.
9) To provide an assett that is not subject to the Alternative Minimum Tax (AMT)-Under current tax law policy Cash Values and Death Benefits are not subject to the AMT.
10) Own an asset that is not a factor in determining eligibility for Financial Aid- as a general rule policy cash values are not a factor in determining eligibility for financial aid for college
11) To provide continuing coverage for those unhealthy individuals, with soon to expire Convertable Term policies- If there policy allows it, converting their term policies to a Permanent one (before they expire) allows continuing coverage for those who have developed health issues since they initially took out the term policy.
12) To pay estate taxes- Clients with large estates may be subject to substantial estate taxes at death. Life Insurance, owned by an ILIT, can escape estate taxation and provide the liquidity needed.
13) To leverage a Gift- Gifts can be leveraged up many times (subject to the annual exclusion, life time gift credit and GST exemption) to purchase a Life Insurance policy outside of the gross estate.
14) To leverage a Charitable Gift- A charity can leverage annual gifts to purchase Life Insurance and obtain a larger donation through the use of Life Insurance.
15)To replace a Charitable Gift- you may wish to leave certain assets to charity, and this could replace these assets for your heirs.
16) To provide for Business continuation- Permanent Life Insurance is typically a better solution for Buy/Sell Agreements between living partners and the deceased partners heirs, and its cash values can supplement retirement income for a business owner.
17) To provide Executive Benefits- If structured properly the cash values can be used to fund deferred compensation retirement benefits paid to executives, and the death benefits can be used as a cost recovery mechanism for the company.
18) To supplement Retirement – The cash value makes an excellent retirement supplement
19) To replace an estate- some consumers may want to spend down their assets during their lifetime while leaving an inheritance to their heirs. for instance this could replace the value of a house being used in a reverse mortgage to fund retirement.
20) Tax treatment benefits for the cash value- Under current tax law policy cash values grow tax deferred and can be withdrawn up to a cost basis, and above that the balance can be withdrawn without being taxed as a policy loan.
I hope these give you some ideas about the flexibility and usefulness of Permanent Life Insurnace.
For information contact us on our website: http://www.farmersagent.com/ctrowbridge
