Get the Right Advice for Life Insurance

Financial advisors play a key role in helping people with their everyday financial decisions, much of which oftentimes includes choices to be made on life insurance.

One area of interest to consumers is when it comes to estate tax planning decisions that can assist them no matter what Congress decides when it comes to estate taxes in 2011.

As it stands now, the estate tax rate is slated to increase from zero in 2010 to 55 percent on estates valued at $1 million and higher beginning in 2011. A White House proposal would alter that to 35 percent for estates valued at $5 million for people and $10 million for couples, however different members of Congress have stated their opposition to it.

Due to the uncertainties, life insurer and other financial advisors have been presenting high-net-worth customers with what can best be considered interim planning options.

As an example, there are current charitable giving strategies that involve life insurance. Consumers can utilize their present cash flow to pay for universal life insurance that will be put in play for charitable giving. By doing so, it makes available a tax deduction for the individual, while the death benefit is tax-free for the charity. ,

For couples seeking life insurance for liquidity to pay taxes at the time of the second death, the advice is to seek a policy with the greatest conversion period available.

Advisors are in the best position if they ask the underwriters to okay the maximum figure of life insurance that may be required. In the event Congress agrees on a new law that requires a change, the individual can convert the first policy to a permanent life policy centered on the new law and their actual need.

Consumers are also advised to maintain the brokerage records of family members who have passed away. The reason behind this is they may have to present those records to determine the cost basis of the assets they inherit from those who passed on, even if the death occurs this year or 2011.

There is also the issue of dividing a couple’s property amongst the spouses.

At the time of separations, the couple’s life insurer might have to assists the clients make alterations to the beneficiaries and ownership on a number of policies, in order to meet the needs of the clients. ,

Given the fact that many consumers do not grasp all the X’s and O’s going on in Washington, D.C., having a financial advisor aboard is a wise strategy.

With all the different information out there for consumers to swallow, it should not come as a surprise that many choose to put off their estate planning and life insurance decisions for down the road.

At the end of the day, many consumers do grasp the fact that there is a debate ongoing regarding estate taxes, however they don’t understand all the details involved.

What one thing is clear to many advisors is that more individuals are purchasing life insurance to give them protection over survivor requirements.

If you’re one of the individuals in need of responses to your financial planning and life insurance questions, don’t wait too late to discover the answers.