The most common and probably smartest answer would be to buy a life insurance policy for the main purpose of estate planning and estate protection. You can purchase a major life insurance based on your net worth and then place it in a trust outside of your estate. Having your life insurance policy issued into a ILIT (Irrevocable Life Insurance Trust) will separate between the life insurance death benefit and your estate, and therefore allow taxation eliminate.
How would you pay the high life insurance policy premiums? The first option would be to pay it out of your pocket, each year, by taking money out of your savings. In some cases you'll have to break saving programs that you kept for a rainy day or even to sell some real estate to cover the costs. The other option would be to finance the premium via a bank or a premium finance company.
Life insurance companies recognize the need of life insurance for estate planning and have approved these types of deals in the past. A Carrier Approved Premium Finance Program is a great tool to support the expense of paying the high premiums on a life insurance policy. The idea behind the Carrier Approved Premium Finance Program is that the premium will be paid by a bank for a certain period of time that is agreed upon in advance. it can range from a 2 year period to a lifetime.
Once the loan is due, all premium paid-to-date in addition to the interest and other fees will be paid back to the bank. in case the insured passes away prior to the loan maturing, all death benefits will be paid to the beneficiaries minus the amount that is due for the premiums. In order to initiate a Premium Finance transaction, the insured must qualify not only by the insurance company standards, but also by the Life Insurance Premium Finance Company.
When it comes to the Life Insurance Company, the insured must be healthy at a standard level or better and prove his/ her medical and financial status. On the Premium Finance Company side, their evaluation will be based on age, life expectancy, health situation and financial status. They will also require some collateral to secure the loan.In conclusion, all senior citizen with a high net worth of approximately $2,000,000 should look into estate protection alternative and may want to think about getting a new Life Insurance Policy to cover all estate tax when they pass away.
How would you pay the high life insurance policy premiums? The first option would be to pay it out of your pocket, each year, by taking money out of your savings. In some cases you'll have to break saving programs that you kept for a rainy day or even to sell some real estate to cover the costs. The other option would be to finance the premium via a bank or a premium finance company.
Life insurance companies recognize the need of life insurance for estate planning and have approved these types of deals in the past. A Carrier Approved Premium Finance Program is a great tool to support the expense of paying the high premiums on a life insurance policy. The idea behind the Carrier Approved Premium Finance Program is that the premium will be paid by a bank for a certain period of time that is agreed upon in advance. it can range from a 2 year period to a lifetime.
Once the loan is due, all premium paid-to-date in addition to the interest and other fees will be paid back to the bank. in case the insured passes away prior to the loan maturing, all death benefits will be paid to the beneficiaries minus the amount that is due for the premiums. In order to initiate a Premium Finance transaction, the insured must qualify not only by the insurance company standards, but also by the Life Insurance Premium Finance Company.
When it comes to the Life Insurance Company, the insured must be healthy at a standard level or better and prove his/ her medical and financial status. On the Premium Finance Company side, their evaluation will be based on age, life expectancy, health situation and financial status. They will also require some collateral to secure the loan.In conclusion, all senior citizen with a high net worth of approximately $2,000,000 should look into estate protection alternative and may want to think about getting a new Life Insurance Policy to cover all estate tax when they pass away.
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