Purpose of Life Insurance
Life insurance may be used in many personal, business and charitable contexts. Some of the most common uses are:
For the Business & Owners
Key Employee: provide funds to aid in the search and training for a replacement in the event of the death of a key employee.
Executive Recruitment and Retention: used to provide a variety of non-qualified benefit programs to help attract and retain key employees.
Business Continuation: provide funds to aid in the continuation of business in the event of the death of a key revenue generator.
Succession Planning: provides liquidity to purchase the ownership interest of a deceased owner.
For Personal & For the Family
Family Protection: provides a source of cash for surviving family members to use for living expenses.
College Funding: provides a funding source for college education for children or grandchildren.
Wealth Creation: provides funds to leave as an inheritance or to equalize inheritances among family members.
Estate Tax Liquidity: creates liquidity to pay estate taxes rather than requiring liquidation of existing estate assets.
Gifting Leverage: leverages the use of the annual gift tax exclusion, the applicable exclusion, and/or Generation Skipping Transfer Tax exemption.
For Charity
Wealth Replacement: used with many charitable gifting programs to replace the value of estate assets that were gifted to charity.
Gift Creation: used to create a significant donation
to charity at death.
Gift Leverage: used to maximize the eventual charitable donation at the death of the insured.