12 Ways Universal Life Insurance Can Protect Your Family and Your Business
Carlton Crabbe
High Value Life Insurance Solutions for (U)HNW Clients of Wealth Managers, Life Insurance Brokers, Trustees, Family Offices and Private Banks. Retirement and Estate Planning Solutions Using Life Insurance
Universal Life Insurance and Premium Finance Planning
Every year, billions of dollars (US$) are invested into Universal Life insurance solutions by High Net Worth (HNW) individuals around the world.
Capital for Life has put together a list of 12 ways Universal Life Insurance and Premium Financing is being used by its clients to protect or secure their family's future or business interests.
Family Security – a large cash lump sum payment to protect your family’s lifestyle in the event of your death as the main income earner. The cash can be used to replace lost future income.
Credit Protection - loans may be recalled upon the death of the insured life. Cash from a life insurance policy can prevent a fire sale of assets being made to repay debts.
Estate Tax Settlement – insurance can be used to pay inheritance or wealth taxes that become due on your death. Your worldwide assets could attract estate tax depending upon how the asset is held and jurisdiction in which it is based.
Tax Planning - many insurance solutions have considerable tax planning advantages, which can often be combined with Trust solutions.
Debt Repayment – credit and loan facilities may be recalled upon death leaving a family short of funds to clear these debts. An insurance policy payout can be used to pay off debts leaving assets to be enjoyed by the family, rather than sold to repay credit secured against them.
Premium Finance - the vast majority of Universal Life insurance policies are sold with premium finance. Clients typically only need to make a downpayment of 10% of the premium value with the remaining 90% being borrowed from a bank or financial institution. With low interest rates, clients can take advantage of potentially greater returns in the insurance policy, as well as maintaining their own capital for other private investment opportunities.
Asset and Currency Diversification - is provided by a financially strong insurer which always prices its policies in hard currencies, typically US$.
Key Man Protection – an insurance pay out can provide cash to safeguard a business if a key individual employee passes away until a suitable replacement is found.
Partnership Agreements – cash from an insurance policy can be used to ensure business interests pass efficiently to the remaining shareholders by providing funding to purchase the deceased’s partners shares.
Heirship Equalisation - Transferring specific assets like a business or a home to just one or two heirs may not create a fair solution for other beneficiaries. Insurance can provide cash liquidity that allows other beneficiaries to inherit equally.
Philanthropy - Meet your charitable giving goals by leaving some or all of the insurance pay out to charities close to your heart without impacting what the family inherit.
Sovereign and Political Risk Planning - an insurance policy creates an offshore asset pool that is protected during times of political uncertainty.
Capital for Life is an independent company with extensive experience in offshore insurance solutions for high net worth clients from the world’s largest insurance companies.
We offer insurance solutions and premium financing to clients, as well as working with clients of private banks, trustees, wealth managers, family offices and insurance brokers.
Email us at [email protected]
We'd be delighted to speak with you.
High Value Life Insurance Solutions for (U)HNW Clients of Wealth Managers, Life Insurance Brokers, Trustees, Family Offices and Private Banks. Retirement and Estate Planning Solutions Using Life Insurance
8 年Thanks for your feedback everyone. I have updated the original post on Universal Life insurance to include the opportunity to Premium Finance the policies, as well as extending the list of planning opportunities to 12. I hope this is useful for everyone involved in Universal Life insurance
UNDERSTANDING PEOPLE
8 年Life Assurance is a practical solution to the insecurity of the family where there is no state benefits to the deceased family. I could remember our family condition after my father's demise. We were almost at the roads.....
Founder Chocolate Finance and Singlife
8 年There are lots more reasons, including asset diversification, wealth creation, or just having that little extra to add to your legacy... Everyone needs life insurance. Why should it be so hard?
Chief Partnership and Marketing Officer - Sun Life International | Executive Leadership | Attorney I 25+ Years of Successful International Insurance, Legal, Banking, and Wealth Management Experience
8 年Very true. These are the most common planning reasons we see. Other, less common reasons also include: Sovereign and Political Risk planning, currency and asset exposure, beneficiary tax planning where kids move to other jurisdictions, and family law and credit protection. Last but not least we see jurisdictions where such product and high capacity simply doesn't exist, and here ULI holds great appeal.