Posted by In the current United States, large-scale wealth transfer is going on quietly.
according to"New York LifeThe Wealth Watch survey reports that 17 percent of adults have inherited wealth from a parent, spouse, family member or other person in the past decade, especially baby boomers (22 percent).This phenomenon is known as the "Great Wealth Transfer of the Times".
Fifteen percent of adults are expected to inherit wealth from a parent, spouse, family member or someone else within the next decade.However, nearly half of the heirs are not ready to manage these wealth.
Cash property stock insurance is the main inherited asset
Among those expecting to inherit wealth, 58% expect to inherit cash, 43% expect to inherit property, 28% expect to inherit investments such as stocks and bonds, and 24% expect to inheritlife insuranceincome, 21% expect to inherit jewelry or other family heirlooms, and 14% expect to inheritAnnuity insurance.
On average, adults who inherit wealth can expect to receive an inheritance worth $738,724.23.
This phenomenon highlights the reality of wealth inheritance. How should we choose the right tool?How to reasonably and legally avoid tax issues?How to effectively use financial leverage to leverage greater wealth?The answers to these questions will help us better understand and manage the wealth we accumulate.
(>>>Recommended reading:What is the insurance lever?Is buying insurance just buying leverage?What is the maximum insurance leverage?)
The role and advantages of life insurance in the process of wealth inheritance
Life insurance plays an important role in wealth inheritance.
Among those expecting to inherit wealth, 24% expect to inherit proceeds from a life insurance account.
Life insurance can not only provide financial security for heirs, but also serve as an effective wealth inheritance tool.
More importantly, the benefits of life insurance are tax-free, which is an important advantage of it as a wealth inheritance tool.
Case analysis of applying life insurance to wealth inheritance
Let us understand how life insurance plays a role in wealth inheritance through a specific case.
Lao Wang, 55 years old, is in good health and likes to play golf.He always jokes that he will live to be 100 years old.Lao Wang has been considering the issue of his wealth inheritance. He chose to use a more concise form of contract to inject part of his physical assets into the insurance contract and transfer it to his wife and daughter. With reasonable leverage, he left a sum of about 500 million dollars of funds.
Lao Wang faces three different types of life insurance product choices:
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- GUL (Guaranteed Claims Universal Insurance)
- GVUL (Guaranteed Securities Universal Insurance)
- GIUL (Guaranteed Indexed Universal Insurance)
These three insurance products have their own advantages and disadvantages, but the core goal is to pay a fixed annual premium and guarantee a death claim of $500 million, all of which can be used as a tool for wealth inheritance.
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- GUL insurance:This kind of insurance product does not have any "superfluous" additional financial management functions. Its sole purpose is to leave a guaranteed claim for children or beneficiaries at a relatively low premium.
- GVUL insurance:In addition to guaranteed death claims, this kind of insurance product also has a cash value. Usually, if you participate in securities and stock investments, you may be able to get part of the money back.
- GIUL insurance:This insurance product provides a guaranteed death claim function, as well as a cash value function, usually participates in index investment, and finally adds a guaranteed return of premium function.
The three different types of life insurance products that Lao Wang chose for wealth inheritance have their own advantages and disadvantages, but they can all be used as tools for wealth inheritance.This case clearly demonstrates the role of different types of life insurance in wealth transmission.
By choosing the right life insurance products, we can effectively manage the liquidity of our wealth and leverage to pass on our wealth.
Article summary
Wealth inheritance may provide financial relief for some.But our day-to-day lives are often disrupted by inflation, growing credit card debt, and unexpected expenses.
According to the survey, lack of emergency savings (29%), health care costs (27%) and credit card debt (26%) are the three biggest blatant financial risks for Americans.
The urgency and reality of wealth inheritance is a problem that we cannot ignore.With the "massive wealth transfer" underway, we need to better understand and manage our wealth to ensure the financial security of the family or clan.
As an effective wealth inheritance tool, life insurance’s tax-free advantages make it more attractive in wealth inheritance. It can provide financial security for our families and help us better manage our wealth. (full text)
