What’s the best life insurance for transferring wealth? Posted in Life When your goal is to leave behind a larger legacy to your family or a charity, some life insurance options are better than others. Single Premium Universal Life (SPUL) insurance policies are a good choice if you want to transfer your wealth in an easy and efficient way. It works differently than other safe, but low-earning investment vehicles like CD’s, fixed annuities or bank accounts. Those vehicles aren’t ideal for wealth transfer, with the average national rate for a 5-year CD being .91%, savings accounts paying .06% and fixed annuities hovering around 3%. This means your money won’t increase very much or help you grow the legacy you plan to leave behind. SPUL insurance can be purchased with a one-time payment and immediately multiplies in value in the form of the death benefit. It is designed specifically for transferring wealth, doing so in a way that maximizes your legacy, minimizes taxes and enables you to access your money later on penalty-free. Here's how it works. 1. It generates additional value. Do you want more to go to your heirs? When you open a SPUL insurance policy, the premium you put in is immediately multiplied into a much higher death benefit that would pass to your heirs. On the other hand, you could earn more. After the first two or three years, the surrender value is guaranteed to grow significantly — faster than most other guaranteed investments today, like CD’s and fixed annuities. For example, SPUL surrender values generate about a 4% rate of return, whereas a CD might pay about 1%. 2. It helps minimize taxes. The death benefit, which is paid out upon the insured person’s death, is generally tax-free to heirs or beneficiaries, which makes SPUL insurance an efficient, safe and simple wealth distribution method. Also, cash and surrender value grows on a tax-deferred basis. Or suppose you have a large estate and you want to maximize the amount of wealth that is transferred to your heirs. SPUL insurance could be used to help your loved ones cover the estate tax bill so they can keep more of the assets you’ve accumulated. 3. It is available penalty-free. Sometimes your circumstances and needs will change, or you will no longer have anyone who would need the proceeds of a death benefit. In that situation, you could choose to close, or surrender, the account to supplement your income and get at least 100% of your premium back (more if the policy had been held for at least a few years due to SPUL’s guaranteed surrender value growth). And you won’t have any penalties for early withdrawal. Is SPUL insurance the right life insurance option for you? Find out by speaking with your local independent Grange agent. Life policies are underwritten by Grange Life Insurance Company, Columbus, OH, and are subject to underwriting approval. Grange does not give tax, accounting or legal advice. Guarantees are subject to the claims-paying ability of the insurer. Not available in all states. This article is for information purposes only. For specific coverage details, always refer to your policy. If insurance policy coverage descriptions in this article conflict with the language in the policy, the language in the policy applies. SPUL is • Not a deposit • Not insured by any federal government agency • No bank or credit union guarantee • Not FDIC/NCUA/NCUSIF insured References - FDIC.gov - AnnuityFYI Share via: Facebook Twitter LinkedIn Email Google + Related resources Grow your money with life insurance Posted in Life Make life insurance part of your personal financial plan and you can both protect and grow your assets. Find out how cash value works and the ways you can use it while you’re living. Quiz: What’s your perfect life insurance match? Posted in Life Love comes in all shapes and sizes. Life insurance does too. Protect those you love the most by learning which type of life insurance is best at every stage of your life. Use this infographic to find your perfect match.