Single with Senior Parents
While Jeremiah has no dependents of his own, he is the primary financial support for his aging parents. He also has long-term financial goals, such as paying off his mortgage for his home and planning for early retirement. Concerned about what might happen to his parents if something were to happen to him, Jeremiah sought advice from a life insurance broker to ensure they would be financially supported in the event of his untimely death.
Jules Advice:
Jules recommended a universal life insurance policy with a death benefit of $1,150,000. Jeremiah learned about the option to pay up his policy in 20 years, securing coverage for life, while also having the flexibility to make additional deposits above the cost of insurance, which would grow tax-deferred. Ultimately, he chose a 20-pay option.In the event of his passing, his sister Imani, the executrix of his estate, would inherit his home and be the beneficiary of his life insurance policy. She would use the lump-sum, tax-free benefit to cover the capital gains on the property and provide financial support for their parents when needed. This strategy ensures that Jeremiah's parents would be financially secure, regardless of when he passes away.
Why the Client Followed the Guidance:
Jeremiah appreciated the dual benefit of securing lifelong protection for his parents and sister while growing the policy’s cash value as an asset. He opted for the 20-pay option, which increased his annual premium but ensured the policy would be fully paid in 20 years. The ability to borrow against the cash value appealed to him, offering a tax-free income source for retirement without selling assets. Though it reduces the death benefit, it aligned with his long-term financial goals and provided peace of mind for his family’s future.
Key Takeaways
Outcome:
Additionally, the policy would build cash value over time, which Jeremiah could access for future financial goals, like a down payment on a home or supplementing his retirement.
Client Scenario
Jeremiah is a 44-year-old, single software developer working for a major tech firm.
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