You Need Life Insurance

Transcript

Mike:

Hey everyone. Michael Reese here again, certified financial planner and founder of the Prosperity Planning system, a system that helps you make those great financial choices so you can enjoy a prosperous financial life. All right. Today’s topic is going to be really exciting. Life insurance. I know you’re thinking what life insurance. No, it’s going to be great. We’re going to talking about the three reasons that you want to hold life insurance as part of your overall financial mix. This is going to be great.

Mike:

Hi gang. The three reasons you want to hold life insurance as part of it, your financial mix. I think you’re going to find this really kind of interesting. I mean, life insurance. I know it’s one of those topics for a lot of people like, eh, I don’t want to listen, but I promise you this is going to be well worth your time. Now, before I dive in, as always, if you like this video, go ahead and click the like button, the thumbs up button, right? We like those thumbs up. Subscribe to the channel, leave some comments. Be nice, please. No internet trolls. And if you want to talk to us about any topic, whether it’s insurance or anything else by all means, click the link below that says, talktomike.com. That’ll take you to our online calendar and set you up for a quick 15 minute introductory phone call. All right. So let’s dive into the three reasons that you want to own life insurance for part of your overall financial plan.

Mike:

Reason number one. Well, what do you think? Reason number one is death benefit, right? You get this big old death benefit now, depending on where you are in life, that death benefit could be used for different things. For example, when you’re younger and you have a young family, the death benefit can be used to pay off the mortgage. If something happens to you and, you know, take care of your family financially, by the way, general rule of thumb. When you’re younger, you want to have at least at least 10 times your salary in death benefit. If you’re making a hundred grand, you should have a million dollar death benefit. Quite frankly, I would say 15 times is even better. All right? What happens as you get older? A lot of people say, Mike, should I get rid of my life insurance in retirement? I mean, I don’t really have a mortgage anymore.

Mike:

I’ve got enough in assets that my spouse will be protected. I mean, do I really need it anymore? Ah, not so fast grasshopper. Right? So here, I want you to think about this. A lot of times, a big chunk of your money is in IRAs or 401ks. These are accounts that have never been taxed. When you pull the money out, you get hammered in taxes. Well, when you’re married, you’re married, filing jointly the taxes. Aren’t so bad a lot of times, but guess what? If you die, your surviving spouse is a single tax payer and his or her tax situation is going to be horrible. Like a lot of times I see this all the time. People when one spouse dies, the surviving spouse or that’s liability goes through the roof because a single tax payer, those rates are the worst in the tax system.

Mike:

So in other words, what I’m trying to say is this it’s really cool for a surviving spouse to get a big old tax-free death benefit in the form of life insurance. If you die leaving your spouse, a tax-free death benefit allows them to convert a lot of your IRA or 401k money into Roth IRAs or Roth 401ks. In other words, it helps them dramatically with their tax planning. I promise you, you’re never going to meet a surviving spouse that says, oh man, you know, like the widow that says, oh, my husband died and left me a million dollars of life insurance. What a terrible idea that was. You’re never going to find that person, right? I mean, it’s always a good thing for a surviving spouse. Okay. Death benefits. Number one. Number two, number two. Why do you want to have life insurance as part of your mix?

Mike:

Oh my gosh, you set up the right way. A powerful and I mean a powerful tax free income engine in retirement. I’m telling you right now. I mean, you could even start this up after you’re retired, if you do it the right way. But especially if you start younger, start putting some money in this stuff, when you get to retirement, if it’s properly designed, it can spin out of tax-free income. Like no other. I mean, it can really provide some powerful, powerful tax free income to supplement your retirement. And it also provides lump sum cash values that are tax-free. So that’s another reason you might want to use life insurance. Again, not everything you do. Part of your overall planning. Number three, most life insurance contracts. These days that death benefit also works as a long-term care benefit. So later in life, as your health goes downhill, you might need to pay for some pretty significant care.

Mike:

You might want to pay some money to have someone come into your home and help take care of you. Well, a lot of the contracts these days, you can use the death benefit instead of waiting until you die for your survivor to get the money you are using that death benefit for you while you’re still alive to pay for, for long-term care expenses. You know, again, we’re talking about a million dollar policy. If you need $300,000 of care, someday you spend it on yourself, the remaining 700,000 goes to your beneficiary. So there you go. Three reasons, one death benefit to tax-free income and three long-term care benefits. Pretty cool. Right? And you thought it was going to be boring. All right, as we wrap up, if you liked this video, just click the like button, subscribe, leave positive comments. And if you want to talk to us about this topic or anything else by all means click the link. It says, talk to mike.com. It’ll set you up a quick 15 minute phone call with our team. We’re looking forward to helping you and talking to you. And most importantly, we want you to enjoy that prosperous financial life.

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