The major characteristic of low load insurance is the flexibility it offers. A primary advantage is most of the premium is allocated to death benefits and cash value instead of sales commission. The fee structure is fully disclosed. In addition, there are no surrender charges. The increased liquidity of the policy allows the buyer to be in full control. This type of life insurance policy has become a common strategy for effective financial planning.
Building flexibility into the policy puts the client in the driver's seat, but does more as well. The financial planner has a better ability to design the policy to meet particular objectives. The policy design can emphasize death benefit efficiency versus cash value accumulation. The policy construction actualizes the implementation of specific strategies to achieve long term financial objectives.
These policies are often used in split dollar executive compensation packages. The capability to adjust the contract is an attractive feature appropriate for using in key employee arrangements. There are number of situations that this is an appropriate funding vehicle because of tax advantages and other features.
The two basic types of split dollar plans are the endorsement plan and the collateral assignment arrangement. These plans are established usually for highly paid executives. The lack of commissions, fees and charges make them attractive as a funding vehicle. The ability to adjust policy benefits and features is attractive to both clients and planners.
An endorsement split dollar situation is when the employer owns the policy and they also pay the premiums. The employee selects the beneficiary. With a collateral assignment situation, the employer pays the premiums and the employee owns the policy. The employee assigns the contract to their employer. The policy's cash value serves as collateral. It can be used for estate planning purposes if the death benefit is assigned to a trust.
Using split dollar strategies can be a powerful financial planning tool. It is a fine example of why these types of policies form an effective technique for estate planning. The investment part of the contract grows quickly when premiums are not being diverted by fees, commissions, and charges. As circumstances change in the clients life, the contract may be adjusted to change the balance of death benefit versus cash value. People appreciate the power to control an financial product.
Other advantages that this type of contract has is the absence of surrender charges. There are also definite tax benefits when the contract is structured in certain ways. For example, fees may be tax deductible. Of course, you should always check with your tax attorney about questions regarding tax law.
Low load insurance policies are useful tools for estate planing, money and financial management, and employee compensation strategies. The structure of the contract allows for flexibility of the policy design. The premium payments can be adjusted. The allocation of premiums between the investment portion and the death benefit can be modified. The flexibility allows a degree of customization that makes this a useful money management tool.
Building flexibility into the policy puts the client in the driver's seat, but does more as well. The financial planner has a better ability to design the policy to meet particular objectives. The policy design can emphasize death benefit efficiency versus cash value accumulation. The policy construction actualizes the implementation of specific strategies to achieve long term financial objectives.
These policies are often used in split dollar executive compensation packages. The capability to adjust the contract is an attractive feature appropriate for using in key employee arrangements. There are number of situations that this is an appropriate funding vehicle because of tax advantages and other features.
The two basic types of split dollar plans are the endorsement plan and the collateral assignment arrangement. These plans are established usually for highly paid executives. The lack of commissions, fees and charges make them attractive as a funding vehicle. The ability to adjust policy benefits and features is attractive to both clients and planners.
An endorsement split dollar situation is when the employer owns the policy and they also pay the premiums. The employee selects the beneficiary. With a collateral assignment situation, the employer pays the premiums and the employee owns the policy. The employee assigns the contract to their employer. The policy's cash value serves as collateral. It can be used for estate planning purposes if the death benefit is assigned to a trust.
Using split dollar strategies can be a powerful financial planning tool. It is a fine example of why these types of policies form an effective technique for estate planning. The investment part of the contract grows quickly when premiums are not being diverted by fees, commissions, and charges. As circumstances change in the clients life, the contract may be adjusted to change the balance of death benefit versus cash value. People appreciate the power to control an financial product.
Other advantages that this type of contract has is the absence of surrender charges. There are also definite tax benefits when the contract is structured in certain ways. For example, fees may be tax deductible. Of course, you should always check with your tax attorney about questions regarding tax law.
Low load insurance policies are useful tools for estate planing, money and financial management, and employee compensation strategies. The structure of the contract allows for flexibility of the policy design. The premium payments can be adjusted. The allocation of premiums between the investment portion and the death benefit can be modified. The flexibility allows a degree of customization that makes this a useful money management tool.
About the Author:
Apply for low load insurance with the help of this great website fiduciaryplannersinsurance.com. To reach the main page, go to http://fiduciaryplannersinsurance.com right away.
PLEASE HELP US SHARE THIS ARTICLE
About the Author
0Awesome Comments!