Are You Comfortable With Your Legacy Planning?

You have a legacy plan. If you say, “I haven’t set up a legacy plan,” I would say, "Actually, yes you have." Without proper planning, you allow the government, nursing home facilities, or others to do it for you. Of course, you need a good will and possibly thoughtful trusts to get you headed in the right direction. You also need health directives to make sure your wishes are followed through. And, you need an executor to make sure things are handled properly.

These things, and more, can be accomplished with the help of a qualified attorney… which I am not. But, as an insurance professional, I can help take care of some basic legacy ideas. Maybe even make them “double duty” dollars. Please allow me to explain…

Today I am going to focus on life insurance with accelerated benefits for long-term care needs and products that have accelerated benefits. In short, accelerated benefits would mean that the death benefit would be paid out to you while living if you can’t perform 2 of the 6 activities of daily living. Let’s look at a real-life scenario:

You may have some dollars set aside that won’t be needed for retirement income. You purchase a life insurance policy with the benefits described. Let’s assume that a problem develops, and you can’t perform 2 of the 6 activities of daily living. This could be a single premium or a periodic payment plan. Let’s say that you opted for a single premium of $100,000. That would get a 65-year-old female anywhere between $180,000 and $300,000 of death benefit (the more underwriting… the greater the death benefit). So, let’s assume a $200,000 death benefit. A health problem occurs, and you can’t perform 2 of the 6 activities of daily living and the $200,000 is paid to you to cover costs. Most payments are made over 3 to 6 years. And, because it is an accelerated death benefit, proceeds should be tax-free.

Okay, what happens if I don’t need those accelerated benefits and I pass away? The proceeds are paid tax-free to a named beneficiary. This is legacy planning. What happens if you have an emergency and need the money? These products accumulate cash value and you have access to them. Some, after a period of time, also feature a “return of premium.” So, with these dollars, you will determine what happens with this portion of your estate.

Bottom line, your financial professional can provide you with information on this type of product. What do you have to lose? This is a tax-friendly approach to an important part of your retirement plan. Let me know if you would like more information about this type of legacy planning. 

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Until next time… good selling!
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Raymond J. Ohlson
Founder & Retired CEO
Ohlson Group
​1-877-844-0900