Family of four, no savings plan
Tom and Kim, with two children ages three and ten, have been diligently working to make ends meet. Despite facing a mortgage, car payment, and lacking a retirement or savings account, they currently do not have life insurance. Tom, as the main source of income, is concerned about potential consequences if something were to happen to him.
To address their financial situation, we promptly implemented a life insurance plan for Tom and Kim. This plan provides a $500,000 death benefit, ensuring protection until the age of 120. The life insurance serves as both mortgage protection and a guarantee of financial security in the event of a terminal, chronic, critical illness, or injury.
Moreover, we assisted them in establishing a cash accumulation sub-account. This account serves not only as an emergency fund but also as a retirement strategy. The projected retirement income in the coming years adds an extra layer of financial security for Tom and Kim.
Legacy for Grandchildren
Michael and Joanna, who have a total of six grandchildren, expressed the importance of providing college funding for all of them. Additionally, they aimed to leave a legacy for their three older children and wanted to avoid large estate tax liabilities. Flexibility to tap into funds if needed was also a key consideration.
After reviewing various options, we presented them with a multifaceted plan design featuring 10 different accounts—one for each child with a legacy, plus one for the grandparents themselves. A particularly beneficial aspect of the plan was the guaranteed income stream from one account, which cascaded into the other nine accounts. This design left Michael and Joanna very satisfied about the legacy they were leaving.
45 year old, single male, high-income
Steve, a single 45-year-old male earning $175,000 per year as a network engineer, is focused on securing a robust retirement plan with a lesser emphasis on life insurance. His primary objective is to establish a comfortable stream of retirement income while growing his money in the stock markets, with a concern for volatility.
For Steve, we crafted a plan featuring a 5-pay annual funding structure. This design is tailored to align with his current asset portfolio and main liabilities. Steve is eager to leverage his current high income and capitalize on the three-to-one leverage available to him. Moreover, the plan offers the potential for tax-free income from age 65 to 90.
As part of this comprehensive plan, Steve will also hold a $1.5 million life insurance policy. A significant portion of this policy can be accelerated as living benefits in case of a terminal, chronic, critical illness, or injury that qualifies.
Retired couple
Scott and Susan, a retired couple, expressed concerns about the durability of their savings, particularly given recent market volatility. Their objective is to sustain their accustomed lifestyle while maintaining financial prudence. Despite a preference for lower risk, they still seek growth opportunities in the markets. Additionally, they are concerned about long-term care needs and potential impacts on their residual income.
In response to their situation, the pivotal element of their plan design was to authorize and guarantee a stream of income. The established account allows them to actively participate in the markets, benefiting from upside growth while being shielded from potential market losses. This approach is designed to effectively address their financial goals and concerns.
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Family of five, has life insurance, with only two living benefits.
Shawn and Lisa, parents of three children aged three, eight, and ten, currently have life insurance that only covers terminal and critical illness. Shawn, the main source of income, is concerned about potential consequences if something were to happen to him. Additionally, Shawn is worried about potential losses in his retirement accounts due to recent market conditions. Lisa is concerned about saving money for their children’s college years.
After explaining the benefits of all four living benefits and outlining ways to use the policy for a college savings plan for their children and a tax-free stream of income for their retirement, where the cash value growth in the policy is credited by linking it to an index and protected by a zero floor.
We proposed three policies for the children for college savings and two policies for Shawn and Lisa, providing all four living benefits and a tax-free stream of income for their retirement.
This design left Shawn and Lisa very satisfied with their family’s financial future.