Insurance Needs:

This is the period when the major source of income is pensions and savings. In this stage, you want to consider ways to protect the cash flow needs of a surviving spouse. Furthermore, medical costs at this stage of life can be huge and therefore, investing in long-term care insurance is an option to be considered at this stage.

Permanent life insurance can be a tax-efficient tool for passing on wealth to the next generation. You may want to consider buying a life insurance policy with money intended for beneficiaries. When you die, the named beneficiaries would receive policy proceeds tax free.

Whatever phase of life you might be going through; planning is the key to having a good life in all of them. So, plan well, evaluate options in the market and ensure that you always stay covered and protected.

In this later stage in life, your strategy should be adjusted to protect:

• A desired lifestyle in retirement
• Ongoing cash flow needs
• Paying off mortgages and other remaining debts
• Potential costs of long-term care for a surviving spouse or family member
• Taxes that may apply to assets inherited or passed to heirs
• Charitable intentions
• Other estate planning considerations

Estate Planning

An intergenerational transfer of a life insurance policy AKA ‘A Waterfall Concept’ is a life insurance plan that provides a tax benefit in regards to intergenerational transfers of wealth. The concept occurs when a tax-exempt insurance policy is rolled over to a child or a grandchild. The origin of this term is derived from the fact that this insurance plan is similar to waterfalls in that it only flows downwards.

Anatomy of the “Waterfall Concept”
The tax benefit occurs when the initial insurance policy is rolled over to the child or grandchild. After the transfer, there are no more tax breaks, and so any funds that are withdrawn from the policy are subject to normal tax liability. However, clients can implement different variations of the waterfall concept to meet different objectives.