How would those bills be paid? What about child care? What about college? Inflation has been making everything more expensive, and interest rates are still low.
Have you talked to your clients about the possibility of paying for a larger lump-sum death benefit?
If the clients or the families needed to replace a breadwinner’s income, how much money would have to be put into an annuity to replace that stream of income?
Some people wonder if the estate tax exemption will be lowered in the near future. Federal estate taxes on amounts beyond the exemption range from 18% to 40%.
Should your clients have extra life insurance benefits that the beneficiaries can use to pay estate taxes?
5. Collections and Equipment
We once laughed at people who collected things like lunchboxes, comics and baseball cards. Then the collections started to be worth serious money.
Your client has some insurance for the contents of their house. Do they need additional insurance for an itemized and photographed list of collectibles?
And what about their tools and computers?
There are many ways donors can support a local nonprofit they feel is really making a difference. Naming a charity as the beneficiary of a life insurance policy is one course of action, but there are others. Have your clients considered buying a new life insurance policy, and naming the charity as the owner and beneficiary?
Explain that the charity is responsible for paying the premiums, but that, in reality, the client is writing checks to the charity for the same amount, and taking tax deductions for these contributions.
The charity receives a lump sum on the death of the donor. If the donor lives a very, very long life, the policy will build cash value along the way.
In sum, insurance isn’t something you buy once and forget about. It’s a part of their financial strategy needing periodic attention.