Life Insurance

Creating Flexible Charitable Legacies

Creating Flexible Charitable Legacies

As people age, their level of altruism has a tendency to increase and often we see an intense desire by clients to leave some sort of charitable gift behind. Whether it is to help the funding of causes they feel passionate about in order to help make a general difference within the world, clients often express a desire to make a change within the world toward the finish of their life and rely on advisors to assist within the planning. Sadly, many retirees are having a harder time making their money last long enough through retirement to feel they can adequately provide additional financial support to the causes they believe in. Often the answer can be found within traditional life insurance products.

Leaving a legacy

As long as a client's overall health is in good condition, a basic term policy can provide the coverage required to best meet the requirements of a client who is seeking to leave a legacy for either charitable giving or create tax–free income for that people they leave behind. The basics of term provides a much better value from the coverage per dollar aspect than other options early on. However, it isn't always the most ideal solution for those seeking to use insurance in an effort to build wealth in order to leave a charitable legacy to the causes that are most significant within their life.

Also considering the fact that wealth management advisors are beginning to express concerns that longevity is increasing to the purpose that clients are running from money, a standard, affordable term policy at age 60 may not ever shell out and will completely negate efforts for leaving a charitable legacy. Instead, the premiums would just be perceived as “wasted” money, leaving them less for gifting and possibly inside a worse situation than when they started.

Convertible term could be the best solution

Overall flexibility is definitely an important element in developing a long-term plan for gifting and legacy needs, especially when looking decades into the future. A convertible term life policy will give the client and the advisor tools to start planning for legacy gifting by starting to piece a solution together over some time and while using convertible feature to transfer coverage to a permanent policy, locking in premiums that will last the rest of their life. This method also allows for that option of exercising the conversion and then selling the policy off to get a life settlement within the event the client wants to gift to a cause before she or he passes.

Instead of using a traditional term life policy as a possible legacy vehicle and watching it expire, converting the policy will help make a temporary solution be a permanent fixture. With clients who are seeking to supply funds to people and causes important to them, convertible term life insurance can be the tool needed to stair-step their plans for leaving a legacy.

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