Creative Life Insurance Solution

Harold and Mary were thrilled at the birth of their new grandson, Jack.  They wanted to give baby Jack a gift that he would have for life and would hopefully cause Jack to think of his grandparents fondly.

It was suggested Harold and Mary consider a gift of Life Insurance.  Properly funded and structured, the policy could provide Jack with valuable coverage for him and his future family.

SOULTION:  The original $1,000 premium per year, which was paid by Harold and Mary – Jack’s grandparents- netted Jack a non-guaranteed cash distribution of $1,436,000 over his 100 year lifetime and, he could still have nearly $1,500,000 of non-guaranteed values left at age 100.  This is truly a gift of a lifetime and would remind Jack of his grandparents for the rest of his life.

Creative SAFE Annuity Solution

Elizabeth is a 78 year old vibrant and healthy widow living on the monthly income generated by her investments.  The problem was, virtually all of her income came from life insurance loans and stocks that were 100% at risk from market losses.  In fact, she had already experienced dramatic market losses that placed her in serious jeopardy of outliving her money.

SOLUTION:  We reallocated 85% of her at risk stock assets and heavily loaned life insurance policies to a specially designed Fixed Indexed Annuity with a flexible income feature.  This created a lifetime income stream of the nearly $30,000 of annual income she needs to live and guarantees she will never be at risk of outliving her money.  Additionally, she has the option to turn off the income stream at any time and, her heirs will still receive the balance of the remaining funds should she pass on earlier than expected.

Elizabeth now has the peace of mind knowing she can maintain her standard of living without concern for market losses ever again.

Business Rescue Solution

Bill and Dave are partners in a successful chain of wine shops.  They put in the long hours it took to get to their current level of success and still rely heavily on each other to run different aspects of the business.

When they originally bought their first store, they wisely contacted an attorney to set up a “Buy/Sell Agreement” to establish how they would buy each other out in the event of their untimely death.

However, they made three common but critical errors.  One, they neglected to account for the prospect of a long term disability.  Two, they neglected to account for how they would attend to the timing of the retirement of each other.  Three, they neglected to account for how they would fund any of these buy-out scenarios when the time came.  

This lack of complete planning would cause the remaining owner to either go into tremendous debt to fund the obligations to the other (or estate of the other) or, suddenly find themselves in business with his partner’s inexperienced spouse.

SOLUTION:  Bill and Dave used company funds to purchase Buy/Sell Life Insurance and Buy/Sell Disability Insurance policies on each other to fund the future value of the buy-out.  Properly structured, the funds used to purchase these policies can provide tax advantages to the company and/or the owners individually.  Additionally, if Bill and Dave live to the point of retirement, the tax deferred funds accumulated can be used to provide for the non-death/disability buy-out of the other partner without saddling the company with debt at such a critical time.