Legacy Planning Strategy
Turn Money You May Never Spend Into a Larger Legacy
A properly designed single-premium life insurance policy allows you to reposition existing assets into an immediate, income-tax-free death benefit. Protect your hard-earned wealth and ensure your family receives exactly what you intend.
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The Repositioning Process
If you have money set aside in a CD, savings, or annuity you don't expect to need for day-to-day living expenses, this simple 4-step strategy allows you to transition those assets efficiently. Tax Free and guaranteed growth.
STEP 01
Identify Assets
Review existing accounts to find underutilized funds not required for your immediate day-to-day living income.
STEP 02
Application
Apply just like you would for any other life insurance policy. Transfer into a single-premium indexed life insurance policy to optimize its value from Day 1.
STEP 03
Reposition The Funds
Transfer into a single-premium indexed life insurance policy to optimize its value from Day 1. leveraged, tax-free death benefit that exceeds the initial repositioned amount.
STEP 04
Leave a Legacy
Pass your wealth smoothly to your beneficiaries, bypassing probate and keeping assets completely income-tax-free.
STEP 05
Leave a Legacy
Pass your wealth smoothly to your beneficiaries, bypassing probate and keeping assets completely income-tax-free.
A few carriers offer a single-premium, indexed life insurance. The policyholder pays a one-time, lump-sum premium payment that funds the policy. The Accumulation Value of the policy grows based on the performance of a market index, like the S&P, but your money is not is not directly in the market.
CASE STUDY
A Hypothetical Example
Consider a 65-year-old individual who has diligently saved $150,000 in a conservative, low-yield account. While these funds provide stability, they may not be optimized for efficient wealth transfer to the next generation.
By exploring a single-premium life insurance repositioning strategy, this individual could potentially leverage that existing asset into a significantly larger, income-tax-free death benefit for their beneficiaries.
This approach facilitates the transfer of wealth without exposing the principal to market downturns, while maintaining access to living benefits should a qualifying terminal, chronic, or critical illness arise.
FOR ILLUSTRATION ONLY
$150,000 Existing Asset
Conservative Savings
Single-Premium Life
Asset Repositioning
Potentially Larger Death Benefit
Income-Tax-Free Transfer
Actual death benefits vary significantly based on age, sex, health, and specific policy terms. This illustration is hypothetical and does not represent guaranteed performance or specific tax advice. Consult a qualified tax professional regarding income-tax-free transfers.
IF THE MONEY IS GOING TO YOUR FAMILY ANYWAY
Make It Work Harder
Immediate Benefit
May provide an immediate life insurance death benefit that generally exceeds the initial single premium you reposition.
No Monthly Premiums
Designed as a single-premium life insurance policy, meaning generally no additional ongoing monthly payments are required.
Tax-Advantaged
The proceeds are generally passed on to your beneficiaries free of federal income-tax, helping preserve your intended legacy.
Important Disclaimer: This information is for educational purposes and is not intended to be tax or legal advice. Please consult with a qualified professional regarding your specific situation and the potential tax implications of life insurance proceeds.
Accelerated Death-Benefit Riders
Help While You Are Still Living
A single-premium life insurance policy can offer more than just a legacy. Should your health change, you may be able to access a portion of your death benefit early to help cover unexpected expenses.
- Provides advances for qualifying terminal, chronic, or critical illnesses.
- Helps maintain control and dignity during challenging health transitions.
- Preserves your remaining death benefit for your beneficiaries.
Compliance Notice: Qualification requirements apply for accelerated death-benefit riders. Benefits and availability vary by policy and state. These riders are not long-term-care (LTC) insurance unless explicitly stated. Receipt of accelerated benefits may affect eligibility for public assistance programs and may be taxable. Consult your tax advisor regarding your specific situation.
TRANSPARENCY & QUALIFICATION
Is This Money You Can Leave Alone?
This is a specialized wealth transfer strategy—not a one-size-fits-all solution. Review these criteria to determine if this approach aligns with your current financial posture.
Who This May Be Best For
- You have adequate liquid savings (typically 6-12 months of expenses) completely separate from this strategy.
- Your primary focus for these specific funds is maximizing the legacy left to your heirs.
- You are in generally good health and comfortably between the ages of 55 and 75.
- You do not anticipate needing this capital for near-term lifestyle or living expenses.
Who Should Probably NOT Do This
- You require high liquidity and frequent access to these specific funds for daily living expenses.
- You have significant outstanding, high-interest debt that requires immediate attention.
- You anticipate major near-term capital needs, such as significant home renovations or long-term care.
- Your primary goal for this money is aggressive short-term market growth rather than stable wealth transfer.
*Tax & Legal Disclaimer: Annuity Gal and its agents do not provide tax or legal advice. This information is for educational purposes only. Please consult with your personal tax advisor or legal professional regarding your specific situation before making any financial decisions.
OBJECTIVE ANALYSIS
A Hypothetical Example
Meet our hypothetical 65-year-old retiree with $150,000 in conservative savings. Before making any legacy decisions, it is crucial to objectively compare the pros and cons of leaving those funds in cash versus repositioning them into a single-premium life insurance policy.
Cash Savings
- High immediate liquidity
- Predictable, though low, interest
- Interest is fully taxable
- No leveraged legacy growth
Life Insurance
- Income-tax-free death benefit
- Potential for living benefits
- Leveraged legacy for heirs
- Lower immediate liquidity
Hypothetical Example — For Illustration Only
Actual death benefits vary significantly based on age, sex, health, and specific policy terms. This is a hypothetical illustration and does not guarantee future performance or specific returns.
Disclaimer: The information provided above is for educational purposes and should not be construed as tax, legal, or financial advice. Please consult with a qualified professional regarding your specific tax situation.
WealthMax
Bonus Life®
Product Spotlight
Equitrust Product Spotlight
WealthMax Bonus Life®
An innovative approach to legacy planning, designed to help you efficiently transfer wealth while retaining flexibility. This single-premium-style product offers a strategic balance of protection and growth potential, without the unpredictability of direct market exposure.
Single-Premium-Style Design
Efficiently reposition existing assets into a dedicated legacy vehicle with a single, streamlined contribution.
Index-Linked Crediting Options
Participate in the growth potential of major market indices up to a cap, while being shielded from market downturns.
Living Benefits
Maintain control with built-in provisions that can provide accelerated access to your death benefit in times of critical need.
Product availability and features vary by state and are subject to change. This material is for educational purposes only and does not constitute tax or legal advice.
THE LEGACY QUESTION
What Is That Money Really For?
If your answer is: That money is probably going to my kids anyway. Then it may be worth comparing what happens if you leave it vs. reposition it.
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Your Questions, Answered
What is single-premium life insurance?
It is a type of life insurance where you pay a one-time lump sum to secure a guaranteed death benefit for your heirs, rather than paying ongoing monthly or annual premiums.
Can I put one lump sum into a life insurance policy?
Yes, this strategy is specifically designed for a single lump-sum transfer, instantly leveraging your asset into a larger tax-advantaged legacy.
Are the proceeds from a life insurance policy taxed?
Generally, life insurance death benefits are passed to your beneficiaries completely free of federal income tax. However, we do not provide individualized tax advice, so please consult your tax professional.
Do I need a medical exam to qualify?
In many cases, no. Depending on the carrier and your health history, qualification is often based on a simple questionnaire and a phone interview rather than a physical exam.
How does this compare to leaving cash in the bank?
Cash in the bank grows slowly and is fully taxable. A single-premium policy leverages your cash into a larger death benefit that passes to your heirs income-tax-free.
Can I access the money if I need it for an emergency?
Yes, most policies offer liquidity features. You can typically access a portion of your cash value, though doing so may reduce the final death benefit.
What happens if I require long-term care?
Many modern policies include living benefits that allow you to accelerate a portion of the death benefit to help cover qualifying chronic or terminal illness expenses.
Are there age restrictions for this strategy?
While available to a range of ages, this strategy is generally optimized for individuals between 55 and 75 who have idle assets they wish to pass on.
Can I transfer funds from an IRA?
Yes, but transferring from qualified accounts like IRAs requires specific planning to manage taxes. We can help you explore strategies designed for qualified funds.
Is my premium guaranteed not to decrease in value?
Once established, the base death benefit is typically guaranteed, provided no withdrawals or loans are taken. The exact guarantees depend on the specific policy chosen.
How quickly is the death benefit paid to my beneficiaries?
Proceeds are typically paid directly to your named beneficiaries within a few weeks of receiving the required documentation, avoiding the delays and costs of probate.
Can I change my beneficiaries later?
Yes, you retain full control over your policy and can update your beneficiaries at any time as your family's needs evolve.
What fees are associated with this policy?
The costs of insurance are built into the initial calculation of your death benefit. There are no ongoing out-of-pocket fees or management charges.
Will this affect my Medicare or Social Security benefits?
Generally, the internal growth and death benefit of a life insurance policy do not impact your Medicare premiums or Social Security taxation. Always verify with a qualified advisor.
Need personalized answers?
Every legacy is unique. Schedule a brief conversation with our specialists to explore how these strategies apply directly to your financial situation.
Note: We do not provide individualized tax advice. Please consult your tax professional.
WHAT IS THAT MONEY REALLY FOR?
You Worked Hard to Build It. Make Sure It Does the Most Good.
If your answer is: That money is probably going to my kids anyway. Then it may be worth comparing what happens if you leave it vs. reposition it.
Empowering retirees to protect their legacy and maximize wealth transfer with confidence and proven financial strategies.
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This material is provided for informational purposes only and is not intended to serve as comprehensive financial, legal, or tax advice. Annuity Gal and its representatives do not provide tax or legal advice. Please consult with your personal tax advisor or legal counsel regarding your specific situation prior to implementing any strategies discussed.
Single-Premium Life Insurance and Annuity guarantees are backed entirely by the financial strength and claims-paying ability of the issuing insurance company. They are not FDIC or NCUA insured, are not bank guaranteed, may lose value, and are not a deposit. Any hypothetical illustrations or hypothetical comparisons presented on this site are for educational purposes only and do not represent actual performance of any specific product or strategy.
Accessing living benefits or death benefits may have tax consequences, and policy loans or withdrawals will reduce the cash value and death benefit. Strategies discussed may not be suitable for all individuals. By utilizing this site, you acknowledge that Annuity Gal shall not be held liable for any damages resulting from the use of or reliance upon the information provided herein.
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