Protection Products

Prepare for the Return to Normal


Most of us are beyond ready to get back to the normal we knew a year ago. And for financial advisors, that means helping your clients prepare for the possibility of taxes returning to higher rates. As clients have questions about taxes, you have an opportunity to protect them with tax-efficient solutions.

There’s also a good chance that these same clients need life insurance. Which just happens to be a great resource for providing that tax efficiency we just mentioned.

To get started, think of your high-income clients. The easy solution for providing insurance is to look at a term policy. It’s relatively inexpensive and the application process keeps getting simpler. But that only gets you halfway there — it doesn’t solve the problem of tax efficiency.

Instead, consider a cash value life insurance policy that provides the needed insurance protection, AND allows them to accumulate money for retirement on a tax-advantaged basis. Let’s go into a little more detail about why this strategy makes sense.

Currently, high-income professionals are paying record low taxes. Consider a family of two working professionals, each making $150,000 per year, for $300,000 Adjusted Gross Income. In this example, the family falls into the 24% marginal tax bracket, which, adjusted for inflation, is the lowest it’s been in the past 70 years (see the chart below). To put it in perspective, in 1981 their marginal tax bracket would have been 64%.




Cash value life insurance can be used to hedge against a “return to normal” in terms of taxes for clients in this demographic. And under our new administration, there’s definitely a chance that taxes will increase in the near future.

Find out more about how cash value life insurance can help your high-income clients create a tax-diversified financial plan. We’re here to walk you through the basics and design the plan that’s right for each individual situation. 


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