How To Build Generational Wealth With Life Insurance – GOBankingRates
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Estate planning is about more than preparing for your death. It’s about preparing to help the generations of your family who follow you to live.
For many people, a focus is on building generational wealth, and that goes beyond simply building up a retirement fund or a stock portfolio to pass on to their heirs. For those who want to know the next generations are cared for, they often add life insurance to their estate plans.
Learn: The Hidden Truths About Life Insurance
Discover: 6 Ways To Start Building Generational Wealth for Your Family
“Life insurance can provide benefits that go beyond payment to meet the immediate needs of beneficiaries,” said Shane Canfield, CEO of Worldwide Assurance for Employees of Public Agencies. “It can create estates or provide funding well into the future for loved ones or philanthropy. For example, as someone with a son who has special needs, I will use a trust, funded with life insurance, to provide for him for the rest of his life. Life insurance is more than a financial planning strategy; it is peace of mind.”
Types of Insurance
In shopping for insurance, you’ll hear two types: term life insurance and permanent (most commonly referred to as whole life) insurance.
According to insurer Nationwide, term life provides a tax-free death benefit to the beneficiary upon death of the insured. It offers insurance protection for a specific number of years, generally ranging in increments from 10 to 30 years. It’s often what breadwinners will buy to protect their young families.
Permanent insurance goes an additional step. It covers an entire lifetime, and it comes with a higher premium payment. It also has a tax-free death benefit but is designed to have cash value over time. It doesn’t expire at the end of a term.
Life Insurance for Generational Wealth
Rachel Marshall, the co-founder of The Money Advantage, is a proponent of whole life insurance, and she has a personal tale behind it.
“Life insurance isn’t a need product; it’s about creating everything you want for your family. And it isn’t just for a what-if scenario; it’s for when,” she said. “My near-death experience showed me that death is a reality we all will face. We don’t know when.
“If you have a whole life policy, you guarantee that whenever you graduate from this life, you’ll leave behind the greatest gift of love so your family can live out the dreams you planned together — whether you’re there for them or not. For me, whole life insurance is peace of mind that no matter whether …….
Source: https://www.gobankingrates.com/money/wealth/how-to-build-generational-wealth-with-life-insurance/