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| I don’t care how you figure it, there’s only so many dimes in a dollar, and the challenge is how to create the dollars necessary to properly fund an estate or succession plan. The best way I’ve found so far is to supercharge your estate plan using a combination of your own cash and bank financing to leverage the plan at a 3 to 1 ratio inside an Indexed Universal life insurance policy, and this is how it works in short summation; The bank uses the policy itself as the sole collateral for the loan. No credit checks, no credit application, no other outside collateral assignments, period. It’s a 10 year plan, whereby the first five years the policy owner will fund the contract at about a 65% level, the bank 35%. The next five years the bank funds the contract 100%. Included in this arrangement is a life insurance trust that owns and maintains the policy, thereby keeping it out of your estate.This is a policy specially designed for this program with no surrender charges, so after the ten years have passed, a participating policy loan is taken out to repay the bank, and the favorable arbitrage between the cash value indexes and the capped policy loan rate cover the cost of the insurance going forward and have the opportunity to grow your cash value rather substantially. This policy is unique in how the indexes perform, the cash value is credited a percentage of a market index, most commonly the S&P, but others are also available, in exchange for non of the losses. The Fidelity Aim index has credited in excess of 18% to the accounts in recent years, so the returns can be quite remarkable, especially when considering your account cannot lose money in declining market years. Critical care and chronic care are also included, generally at a $250,000 amount for each. Most folks will utilize the unique features to supercharge their retirement plans, as there are no limits like typical qualified retirement plans, but it works equally well in funding an estate plan. You are wise to be thinking about this while you are still young and plenty of time to get your affairs in order, and likely haven’t developed any serious health issues yet that would prevent you from being eligible for the program such as I outlined above. You lose your health, and your on to plan b, and things then become much more difficult.
Edited by Boone & Crockett 3/3/2021 07:37
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estate planning with or without life insurance?
