11 June 2012 0 Comments

The Legacy Factor

I just discussed how Permanent Life Insurance contributed to a charitable organization can create a legacy for the donor.  But not many of us will follow that path.  Sure, we may leave some money to charitable/religious/educational organizations at our death, but only a small percent of us will be inclined to create a Wall of Fame at our death.

But, wait just a second!  That’s not necessarily true.  Most of us have family members—children, grandkids, nieces, nephews—for whom we would like to leave something meaningful.  Call it your family Wall of Fame.  You can do that without life insurance, but life insurance proceeds paid to beneficiaries will go directly to those who are important to you.  No waiting for a will to be settled; no squabbling over legal matters; no disappointments that the portion you intended to leave just shrank away in your final years.

I can’t tell you how many people I’ve encountered with term insurance who grieve when they find out they cannot continue coverage for those whom they love.  At their age the term is too expensive and their conversion rights have expired.

Several years ago when the Estate Tax deduction was only $1Million my wife and I purchased a Second-to-Die policy to cover estate taxes.  With the current deduction raised to $5Million we don’t have a great need for liquidity, but I can’t tell you how happy I am to know that our two sons will have the proceeds of that policy after we are both gone.  Being able to share our good fortunes now and to continue to share into the far distant future is a great feeling.

When I sold my company several years ago I really didn’t need to continue a life insurance policy on my life.  Our assets were liquid and substantial enough to take care of my wife at my death.  But when I discussed this with her she was stricken…what, no life insurance?  That’s when it dawned on me that a life insurance policy is not just a sum of money or a legal contract.  It is the finest love letter a man can write to his wife.  Needless to say, I still carry a Permanent Life Insurance policy as my love letter to her.

Next, I’ll be discussing some of the frustrations involved when applying for life insurance.

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