|Copyright:||(c) 2011 A.M. Best Company, Inc.|
|Source:||A.M. Best Company, Inc.|
The new U.S. estate tax law represents a unique opportunity for life insurance agents to help wealthy clients engage in legacy planning but the temporary law probably won’t translate to a big increase in life insurance policies being sold by companies that focus on this market, an industry expert says.
Following “a mad rush” in December to pass the law, the industry worried demand for life insurance would drop, said
The estate tax has long been the cornerstone of marketing estate-related life insurance policies.
Estate taxes represent a reduction to the money in estates that will be transferred to heirs, he said. So a need for a life insurance policy is created to the degree that there will be “a quantifiable dollar amount” because of the tax. It ties to the need for cash, said Amoia, an estate-planning attorney.
Crump Life, which focuses on the wealthy, connects about 200,000 independent agents and financial services professionals across
But Amoia said one of the conversations he’s had with wealthy clients is that the law represents “a unique opportunity” for legacy planning. Suddenly, life insurance, outside an estate, creates an asset class for those clients because for the next two years, they can move money into trusts to create a legacy and “the ultimate goal at the end of the day is to try to create the biggest pot of money for our clients.”
What happens at the end of 2012? There likely will be an estate tax, and there will be a need for planning, Amoia said. Even if there isn’t one, the bottom line is that Crump Life continues to tell clients to do some planning today. There’s a wealth of other planning issues that arise that have nothing to do with taxes, such as creditor protection and asset protection, that they need to consider, he said.
To see the entire interview with Amoia, go to http://www3.ambest.com/ambv/displaycontent/MediaArchive.aspx?PC=3008