I was meeting with Susan because she was interested in our annuity rates and she had money sitting in a CD at her bank earning not even half of what we were offering. As I began gathering information I learned that the money in the CD wasn't for her. She had planned on setting this $50,000 aside for her 5 grandchildren. She hoped that at her current age of 65 she was going to live to see them all graduate and start families of their own. When it was her time to "go to the Lord" as she said, she wanted them to each have $10,000, hopefully more after 20+years.
I could tell that Susan loved her grandchildren dearly and really wanted to leave this gift. I asked about her own children and why not leave it to them. Both her son and her daughter were doing fine and didn't need the money. She though this would be a good way to help the grand kids get started, pay off some college debt etc. I agreed and continued with the paperwork.
Before collecting signatures and the check I asked Susan if I could present another idea to her that she may find interesting. She filled my coffee cup and I took that as a yes.
"You know", I began, "that your grand kids won't get all of the money that you want them to have, right?"
She looked at me a little sideways, "what do mean?"
I smiled, "you know there is a primary beneficiary not listed on these policies, sort of a secret beneficiary, a silent partner if you will that will demand his share before your grandchildren get theirs."
"You didn't mention that when we were completing the paperwork. Who is it? You?", she quipped.
I chuckled and took a sip of coffee. "No, it's not me. It's your Uncle Sam. The money will go to the grandchildren but he'll demand his share of the bounty."
She sat back in her chair, relieved. "Oh yeah, I forgot about that. He's the 'silent partner' in almost everything."
"Almost", I said, "but not everything. Susan, if I can show you a way to keep Uncle Sam from touching a penny and at the same time give your grandchildren more money, would you be interested in hearing about it?"
She grabbed her cup, filled it up, took a sip and said, "does a bear..., well yes!"
"Great!", I said. I pulled out an illustration and began to go over it with her. "It's called a Single Premium Life Insurance Policy. Just like the name suggests, it's a one time payment or a single premium. That same amount of $50,000 that you are planning on putting into the annuity would provide a death benefit of around $105,000 for your grandchildren."
Her eyes lit up as she did the math. "So instead of them getting $10,000 or maybe $15,000 years down the road they would each get $21,000?"
"Sort of", I began, "they would get that if you died in the next year or so but if you lived to say 85 years old the death benefit would be closer to $130,000 based on current rates. But on the guaranteed side, never less than the $105,000. Add to that the fact that they would receive it income tax free and it's a huge win."
"What's the catch?", she quickly asked.
"I guess the biggest 'catch' would be that you would have to qualify for it medically. We'd have to run it through underwriting. You know, an application with medical questions, check on your driving habits," I said with a wink, "maybe an oral swab. Things like that. If all that looks good, we're off to the races."
She thought for a minute. "I'm on some blood pressure medications but other than that I'm healthy. My daughter says I drive like a maniac but she's the one with two speeding tickets! What about the money? I mean, I don't expect to need it but what if I do? Can I get it out of the policy?"
"That's a slight catch", I said. "You can get it out but if you do Uncle Sam will be there with his hand out asking for his cut of any gains you made. The gains have to come out first and they will be taxed as regular income."
"No wonder they call him a 'rich uncle'", she laughed. "Let's do that instead of the annuity. It's for the grand kids and I want them to have as much as possible."
I hit a few keys on my computer to bring up the application. "Great, I will need the names of 6 beneficiaries though."
She put down her coffee cup. "6? I only have 5 grand kids. I suppose you or Uncle Sam need a cut?"
I laughed, "no, this policy also has a charitable rider attached for free. It allows you to name a Catholic Charity as a beneficiary of additional monies. So your grandchildren will get the full face amount and our company will send another check to your favorite charity. It could be the Church, the Seminary, or maybe the St. Vincent de Paul food pantry where you spend every Thursday morning?"
"St. Vincent de Paul would be perfect. Let me get that information for you."
Single Premium Life Insurance Policies are a great way to make your money work for you and to leave a legacy. Contact me today for details. 740.324.0702 (call/text), hahnjamesm@gmail.com (email/hangouts/duo).
Legal Information: Information and amounts listed are for entertainment and educational purposes only and do not represent any particular policy, company, rider, or persons. Contact me for a free personalized quote for your situation.
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