It occurred to me after reading a study that many retired people might be missing an opportunity to increase their inheritance without any investment risk.
This study indicated that the majority of retired people die with significant cash assets untouched. Whether that is in annuities or just left in a bank, there is cash that is going to their heirs because they just didn’t need it. The study also indicated that many retired people who are still around can identify large amounts of cash that they know they won’t need in their life time.
For the sake of this thought, let’s say that the amount of cash they have that fits into this category is $50,000 (the average was actually much higher than that). What if, rather than letting that sit around making 5% interest, you put the money into a single pay universal life policy. Depending on your age and health it might buy $150,000 or more of life insurance. The policy is guaranteed, so once that premium is paid the policy will absolutely stay in force with any further payments until your death. Upon your death it will go to the beneficiaries income tax free.
Bottom line. Evaluate your assets and see if they wouldn’t be more valuable as a way to buy life insurance than as an anchor in an investment account. Worth a thought!
This post is somewhat dated. Life insurance underwriting is changing and evolving continually. For more updated information check out some of the key word links. If you have a specific question or topic you need information for do a search. If you don’t find the answers you need contact me and we’ll make sure you get the information that is important to you.