Is Life Insurance a Legacy Plan?

Are You Leaving Your Family a Secure Financial Legacy?

Think about the word legacy. What comes to mind? You may be thinking about the legacies of your parents, your grandparents, and the generations before them that continue to influence your life.

You’re creating a legacy as well, whether you realize it or not. Sharing your memories, stories, and traditions with family members is one way you may already be creating a legacy. Another important part of creating a legacy is to make sure that your loved ones are financially secure even if the unexpected happens and you’re no longer around to support them. That’s what’s known as a financial legacy.

Think about what might happen if you died and your family suddenly lost not only you, but your income. You may want your financial legacy to include making sure your spouse has the funds to stay in the family home. Or, you may want to leave enough money so your children can pursue a college education. It’s a lot easier to set a course once you think about who you want to protect and how.

How Life Insurance Can Help You Leave a Financial Legacy

Life insurance is one way to help you leave a legacy for your family and make sure their financial future is protected. With life insurance in place, your beneficiaries will receive a lump sum of money when you die. Typically, your beneficiaries won’t have to pay any taxes on the money they receive from your life insurance policy. That’s good news because they’ll be able to enjoy the full value of the payment.

Here’s another way a life insurance payment can lessen the impact taxes may have on your family: A portion of the death benefit from a life insurance policy can be used to pay any taxes that may be due on your estate. That way, you know you’ll be passing on the full value of your estate to your heirs.

Of course, you'll want to speak to your tax advisor about your personal situation before making any decisions that may impact your or your family's tax responsibility.

Wealth & Protection Transfer

Some life policies allow you to change the life insured1 (Subject to the approval of the insurance company), which gives you the option to pass on your wealth and life protection to the next generation at an earlier time if you wish. A life policy also allows you to change your designated beneficiary (ies), so you always have the flexibility to allocate your insurance proceeds by making corresponding arrangements with regard to your insurance policy.

Build Your Legacy Your Way. Your Financial Advisor Can Help.

There’s no one right way to create a legacy, but life insurance can help. Permanent insurance can be used to strengthen any plans you already have in place or be the foundation of your legacy. Just remember, the most important part of any legacy plan is knowing that it will remain intact for future generations, no matter what.

Life insurance gives you ‘legacy protection’. In many ways, it protects the legacy that you wish to leave for your loved ones, while at the same time makes sure you don’t compromise on your present. It not only protects their financial future, but also makes sure they have enough to leave a legacy of their own.

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Luyako Nsamba has been a full-time wealth consultant since March 2022, with a focus on life insurance, education financing, investments & retirement planning. You can also follow him on socials, Facebook , Twitter , Instagram , YouTube and TikTok .

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