Many people may not know that life insurance is a great way to pass wealth to maximize it's impact for those you care about.

When you think of life insurance, you may think of a relatively straightforward insurance policy that provides financial security to family members after your passing; a policy to help your surviving beneficiaries pay for end-of-life expenses and to replace your lost income. This is certainly a worthwhile use of life insurance, though you may not have considered other, equally worthwhile, uses for life insurance.

Many people make plans to leave monetary gifts to family members, organizations like churches and schools, or even to a community after their passing. If this describes an intent of yours, you may want to consider the option of a whole life insurance policy to strengthen the impact of the legacy you leave.

It builds cash value. A whole life policy can be used as an investment tool, particularly for those with a high net worth. The accumulation can outpace many traditional investments typically used for these legacy-building purposes, such as CDs. Additionally, a whole life insurance policy can be structured to issue regular dividends if necessary.

Tax law protects the assets. Simply put, the proceeds from a whole life insurance policy are tax-free to the beneficiary; a large advantage to those who wish to eliminate estate taxes. The proceeds are not reported as income, and therefore avoid being taxed. Under specific scenarios the money may be subject to taxation, if funds are withdrawn before death for instance. For purposes of building a legacy to leave after your passing though, tax can usually be avoided.

Additionally, the premiums paid are also not taxed, ensuring the maximum transfer of wealth possible to those individuals, organizations, and institutions you care about.

As an example, let’s say a 65 year old nonsmoker male has $17,000 in a CD growing with a 1.0% interest rate. This money could be used to purchase a single premium whole life policy, and immediately increase the value to over $30,000 tax-free to the beneficiary, instantly adding $13,000 of worth.

The concept of leaving a secure, growing asset to those you care about without the burden of needing to pay taxes on the gift is an appealing proposition for many people.

It is important to discuss the details of your specific situation with your licensed Loman-Ray agent to make sure you find the right policy for your needs and to accomplish the kind of legacy you intend to leave to your beneficiaries.

The above is meant as general information and as general policy descriptions to help you understand the different types of coverages. These descriptions do not refer to any specific contract of insurance and they do not modify any definitions, exclusions or any other provision expressly stated in any contracts of insurance. We encourage you to speak to your insurance representative and to read your policy contract to fully understand your coverages.