When I speak to groups I will ask this question, "raise your hand if you want to buy life insurance?" Everyone snickers, and no one raises their hand. Nobody wants to buy life insurance. But using life insurance strategies can be a beautiful thing.
If my client's account is for the benefit of the spouse and or the children, one possibility I look at is spinning off a certain percentage each year and re-directing that percentage (after tax) to a guaranteed death benefit life insurance policy?
With the cheap insurance rates we have today, I can help my clients enjoy substantial leverage, all on a guaranteed basis. It's very common that you can use a 5% distribution stream from the portfolio and more than double the overall after-tax net when using life insurance.
In other words, a client with $500,000 in an IRA may end up providing well over 1 Million to the spouse TAX Free using this concept and variations off of it.
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