Posted by In American society, life insurance with cash value is a comprehensive financial tool and a basic strategy for wealth accumulation.
According to the statistical report of MarketWatch1It shows that more than half of Americans (51%) have life insurance policies.
For every Chinese family, with the accumulation of wealth and the growth of experience, at different stages of life, we will eventually come into contact with and choose to use the comprehensive tool of American life insurance policy.
And most people think that life insurance is just a guarantee to our family and children when we unfortunately have an accident.But in today’s column,insurGuru™️Insurance AcademyWill share three other important roles of life insurance in American society.
1. Use COLI to enhance our business
COLI is the abbreviation of "Company Organization Holder Life Insurance Policy".
For those who run a business or start a company, the "cash value" of life insurance can be used to directly pay the premiums of such policies.
Which companies or institutions like to buy life insurance for company executives or members the most?The answer is: commercial banks.
Chart of commercial banks buying life insurance for company members
Banking institutions have always been big buyers of life insurance.As a commercial company, COLI Life Insurance allows the company to provide additional benefits to the management and employees while at the same time expanding the company's net assets.For example, as a business owner, we can apply to COLI Life InsurancePolicy lendingWay to pay for all kinds ofThe cost of insurance(Health insurance, life insurance, etc.).
OnAmerican Life InsuranceGuide netPolicy financing columnThe analysis pointed out thatCompanies can also use the COLI life insurance policy to finance the insurance policy, so as to obtain more credit funds with a lower investment.
The reasonable use of COLI insurance policy financing and borrowing from the insurance policy will significantly help companies increase their net assets and improve their ability to resist financial risks such as liquidity shortages.
Finally, because the ownership of the insurance policy belongs to the company, when a partner or key member of the company suffers misfortune, the death benefit of the insurance policy can help the company deal with the complex issues of equity allocation, or simply be used to recover long-term investment costs.
2. Become a source of income
As each of us grows older and enters different life stages, we accumulate a lot of life experience and at the same time accumulate a lot of expenses-for example, there are mortgages and car loans in large areas, and in small areas. Increasing health insurance, water, electricity and gas network and other household expenditures.
If, at some point, our financial situation is not very smooth, and paying bills becomes a stressful time, policyholders can "withdraw" cash from the cash value account of the life insurance policy to pay for living expenses.
In the field of professional planning, some family wealth planning experts will recommend the use of life insurance to pay inheritance taxes.When the policyholder dies, we can use life insurance claims to pay related taxes instead of using the policyholder’s current profitable investment portfolio. At the same time, due to the higher payment leverage of American life insurance policies, the beneficiaries will receive far-reaching benefits. Exceed the actual payment of claims.
With the product evolution of the American life insurance industry, most American life insurance policies can already be withdrawn and settled while the insured is still "alive".
For example, how to consider the long-term illness of the insured, unable to work and earn income, or need additional funds to take care of children or caring for relatives. Certain life insurance policies of the insured can also provide much-needed extras in these unexpected situations funds.
This type of claim is through "Rider(additional terms)”. When we apply for insurance, our in-depth understanding of the additional terms will help us understand all the benefits we have.
3. "Fair" wealth inheritance
In an ideal world, we would want to pass on wealth "fairly" to our children and heirs.However, the reality is another situation-our complex asset allocation makes the allocation very difficult, and the asset value in the eyes of the children and heirs is always different. In this case, life insurance has become the most commonly used solution. tool.
Life insurance uses cash compensation to settle all our legacy assets in a unified way of "cash".We can leave all the "cash" to one child, and then leave the assets to another child.
In other words, life insurance can provide cash value of the same asset size.When faced with the issue of wealth inheritance, there is no need to first liquidate and sell the assets we hold. After the settlement is made into cash, the cash is distributed among family members.This traditional approach is not only inefficient, but also interrupts the long-term accumulation of wealth.Therefore, with life insurance, family business owners can gift business to one of their children, while also gifting cash to children who are not interested in operating the company.
Article summary
A traditional function of life insurance is to cover our family and children in the event of an accident.However, the American Life Insurance Guide Network emphasizes that the nature of American life insurance,It is a flexible and even perfect financial tool——This tool provides the core ability to protect and escort every family's wealth.
Under the current socio-economic system in the United States, life insurance is not a templated commodity, but a very flexibleFinancial tool, With a high degree of versatility and customizability, after professional configuration combination and targeted design, it can calmly deal with various unpredictability in the future.
appendix
01. "New Study Reveals More Than 40 Percent of Americans Don't Have Any Form of Life Insurance", 2018.09, MarketWatch, https://on.mktw.net/2UlXdFi
