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4 Ways To Protect and Increase Generational Wealth Through Life Insurance

Updated: Dec 15, 2023

a persons shoulder next to a sign that says strategic ways to protect your assets. This includes generational wealth

Life insurance can potentially protect and even increase generational wealth in ways many people don't know about. Have you taken a look at the various options lately? Life insurance is not just a safety net; it's a cornerstone for preserving generational wealth.

While buying a term policy and investing the difference might be a good idea for younger people with few assets, your needs and priorities may shift as you grow older. As you accumulate more assets and start thinking about generational wealth, the role of life insurance becomes even more critical.

Learn how higher-net-worth individuals might use life insurance to their advantage in building generational wealth.

1. Using Living Benefits to Protect Generational Wealth from Long-Term Care Costs

The monthly costs of assisted living can be exorbitant, especially if you need advanced care, want a private room in a top-notch facility, or live in a high-cost area.

A permanent life insurance policy with a long-term care rider can help cover these expenses if they come up. If they don't, you can potentially leave the policy's full death benefit to your heirs, thereby securing your generational wealth.

2. Creating a Safeguard Trust to Preserve Generational Wealth and Assets from Long-Term-Care

This kind of trust is not very well known. As a matter of fact, out of all the attorneys in the United States, only 750 know how to set up one of these. The Safeguard Trust will save your assets from lawsuits and keep you from going broke in a nursing home. Integrating this trust with a life insurance policy can create a robust framework for protecting generational wealth.

3. Creating a Life Insurance Trust to Minimize Estate Taxes and Maximize Generational Wealth

To prevent life insurance proceeds from being classified as part of your taxable estate, you might create a trust that would own and benefit from an insurance policy on your life. Your annual gifts to the trust can pay the policy's premiums. This strategy is particularly effective for those looking to pass on generational wealth without the burden of hefty estate taxes.

4. Using Life Insurance to Benefit Your Favorite Charity and Enhance Generational Wealth

Instead of making small, annual cash gifts, it may be possible to redirect that money into a permanent life insurance policy and name your favorite nonprofit as the beneficiary. This strategy leverages smaller sums to generate a larger donation. Moreover, this can be a part of your legacy, adding another layer to your generational wealth.

Contact CQ Consulting Services to Optimize Your Generational Wealth and Life Insurance Strategy

If you'd like to know more about how these approaches might benefit you, contact us today! We can explain these options and others to help you preserve your legacy.

Check out our Cash Flow Hacks podcast to learn more about utilizing debt to create cash flow.

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