Time to revisit cash value life insurance
December 6, 2016 by Brett W. Berg
For many years, especially when the estate tax exemption was low, the focus of estate planning strategies with life insurance often shifted to how the minimum premium can be leveraged for maximum death benefit. With the 2016 estate tax exemption at $5.45M for individuals and $10.9M for married couples, and at $5.49M and $10.98M respectively in 2017, the time may be ripe for the planning pendulum to swing back towards a balance between securing the proper amount of death benefit and the opportunity for cash accumulation in permanent life policies.
One of the reasons why clients may find these policies attractive is the potential to accumulate cash value that can provide another source of income to meet their retirement needs. Of course, the need for death benefit must be established first and foremost, along with other savings vehicles such as 401(k)s and/or other qualified planning opportunities are ordinarily maximized before considering additional savings vehicles, such as cash value life insurance.
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