How life insurance can help your clients with estate planning needs

North American Agent Appointment Forms  What you need to know when meeting with your clients

Estate planning can be a complex topic that may involve several client advisors. As a life insurance agent, you want to make sure you are able to address as many needs as possible where life insurance may help clients reach their goals. Your key to success is to go into estate planning situations prepared with possible solutions. Here is some guidance to help you with a successful meeting.

To get started, take time to plan your visit with your client. Identify questions that may help you discover key information. The goal is to offer solutions that meet the client's needs. Here are several questions about needs and the solution that may develop.




Do you have kids?
This question opens up discussions about what the client wants to do for children. It can be a point of reference for future discussion. Find out if the children are involved decision makers or have strong opinions about the planning process.

Do you have grandchildren?
Secondary education funding may be a goal for the grandchildren or their children. A gift for the grandchildren and children can be nice at a time when financial help in early adulthood would be much appreciated. Or, what if the client has substantial IRA or 401k funds set to generation skip? In this scenario, it may be possible that the children may inherit less than the grandchildren. Life insurance may be a way to balance the situation.

How big is your estate?
It's possible that the clients haven't done the math yet. Identifying this figure will help start conversations about estate taxes and the different solutions that may be involved. Life insurance may be a solution to help cover some or all of these expected costs.

Have you thought about the future of estate taxes?
The current environment makes planning for federal estate taxes challenging. Ask the client's opinion on his/her thoughts.

Are you familiar with your state death tax rates?
Clients may not be aware of state death taxes or the appropriate exemption amount for their state. This conversation may result in identifying a life insurance need to cover state costs even if the client is within federal exemption limits.

Do you expect future gifts or inheritances?
A client's estate size today is unlikely to be the same years down the road. By helping your client recognize the impact of significant estate growth, you can more accurately cover estate tax needs.

Do you have a family business that you would like to pass on?
A family business often struggles to survive as it passes through generations. Life insurance may be used by the business itself on the owner( s) as key people, or used to by the family to help avoid the business being liquidated or highly stressed to pay estate taxes.

Do you have land or hard assets of significant value?
Selling these assets could generate the funds needed to settle an estate, but a rushed sale in order to pay federal estate taxes is not an ideal situation. These assets may contribute to a large percentage of the estate's value making it difficult for the executor to handle. Life insurance can help cover estate taxes or be used as a balancing tool to equalize inheritance between those who receive valuable hard assets and those who don't receive the assets.

Are there any charities that are close to your heart?
Life insurance may be beneficial for charitable bequests. For pennies on the dollar, life insurance can provide a great gift. By transferring by rule of contract, this would be outside of probate and may be gifted various ways to allow for different tax advantages.

Do you have an outstanding mortgage?
Not every client will die with a house paid in full. Though some clients may not be concerned, others are motivated to see that all of their debts are covered and won't reduce their estate size in other areas.

What are your goals in estate planning?
This is a key question that when left open will help you identify the client's motivation items. It's likely that many goals may be achieved using life insurance. Some goals could be helping to:
  • Reduce estate settlement costs
  • Provide sufficient estate liquidity
  • Preserve the value of the estate
  • Plan for orderly disposition of a business interest
  • Make specific bequests
  • Minimize taxes
  • Maximize amount to heirs
  • Balance estate
  • Provide for spouse/children/grandchildren
  • Education funding

North American Company does not give tax or legal advice. Please consult a tax advisor before making a gift in relation to insurance that qualifies for a gift tax exclusion.

Life insurance policy will have generally income tax free death benefits.

North American Company nor its agents give tax advice. Please advise your customers to consult with and rely on a qualified legal or tax advisor before entering into or paying additional premiums with respect to such arrangements.

The primary purpose of life insurance is to provide a death benefit to beneficiaries. Because of the uncertainty surrounding all funding options except savings, it is critical to encourage your clients to make personal savings the cornerstone of their college-funding program. However, even a well-conceived savings plan can be vulnerable. Should your clients die prematurely, their savings plan could come to an abrupt end.

To protect against this unexpected event, life insurance may be the only vehicle that can help assure the completion of a funding plan. In addition to the financial protection aspect of insurance, the tax-deferred buildup of cash values can be part of your clients' college savings plan. Generally, distributions up to the contract's cost basis are tax free. Moreover, loans in excess of the cost basis are also tax free as long as the policy remains in force.

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  P.O. Box 30248
  Charleston, SC 29417
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