Human Life Value Protection

Property values, whether they exist in the context of a family or a business, are in fact the result of human effort. Human life value is clearly seen in a family whenever income is earned to provide for that family’s economic needs. Human life value is clearly seen in a business where a key person is often identified as a significant contributor to revenue and earnings.

Whole life insurance provides a means by which an individual may insure their human life value.

Solomon Huebner defines Human Life Value as the capitalized monetary worth of the earning capacity resulting from the economic forces that are incorporated within our being: namely, our character and health, our education, training, and experience, our personality and industry, our creative power, and our driving force to realize the economic images of the mind.

Most people see the importance of insuring the value of property such as their home or car for its replacement value and are able to do so with their casualty insurance. The human life value of an individual, which is by far the most valuable asset of a family or business, is also insurable for its replacement value on a permanent basis with whole life insurance. Whole life insurance provides an affordable, effective way of permanently indemnifying a family or business against the loss of its most valuable asset.

There are many benefits that a family may enjoy from the production of income, such as the purchase of a home, rearing and education of children and the enjoyment of life.

The indemnification of the breadwinners in a family will ensure that these benefits will continue to the survivors in the event of death.

Family Protection

The death benefits of life insurance can assure the economic continuity of a family at a time when it is faced with the greatest of all possible traumas: the death of a beloved father, mother, husband or wife. Whole life insurance can also assure financial stability through the funding of;

• Mortgage protection;
• Education funding; and
• Income needs.

Business Protection
Businesses face special insurance funding needs in order to provide a business continuity plan that will protect the owners in the event of death. Whole life insurance is ideally suited to provide the capital needed to adequately buy the interest of a deceased owner and indemnify the business against the loss of the services, expertise and skill of a key person. Life insurance is ideally suited to address four major areas of business planning:

• The funding of buy-sell agreements and stock redemption plans;
• Funding of supplemental retirement programs;
• Key person indemnification; and
• The payment of loans and mortgages.

Estate Planning

Planning for the orderly transfer of property at death can minimize taxes and provide for heirs in a way that will reflect an individual’s desires. Whole life insurance plays a key role in providing for loved ones by offering:

• Adequate liquidity to pay estate and inheritance taxes;
• Assets to generate incomes for a surviving spouse and children;
• Estate equalization among heirs; and
• Funding of special needs children.

Asset Maximization

One of the unique benefits of whole life insurance is the way it enhances the value of other assets in your estate. The presence of guaranteed whole life insurance gives the owner the ability to use estate assets in ways that would not be possible in the insurance did not exist. Whole life is the "permission slip" that may enable you to maximize retirement income and your personal net worth. For example:

The Power to Consume - The presence of whole life insurance in your estate will allow other assets to produce greater income by providing access to the principal as well as interest as a source of income. Life insurance gives the owner the power to consume assets that would otherwise have to be managed in an ultra-conservative fashion in order to preserve the principal and the income stream it produces.
 
Pension Maximization - Most retirees will select a joint and 50% survivor annuity as the retirement income option on their pension plan. The cost of selecting this option is a lower retirement income, as much as 15%, followed by an income to the surviving spouse of 50% of the lowered retirement income. The presence of permanent whole life insurance may enable a retiree to take a much higher retirement income in the form of a single life annuity because the insurance benefits will be available to a surviving spouse as a future source of income.
 
Charitable Remainder Trust - The cost of successfully building a business or managing a personal investment portfolio is often measured by the enormous capital gains tax that must be paid when a business owner looks to sell a business interest or portfolio holdings in order to fund retirement income. Often financial success brings with it a desire to express benevolence towards those charitable causes that are of particular interest. With a charitable remainder trust, these two seemingly diverse needs and desires can meet in a plan that provides:
 
• A lifetime income for a benevolent donor;
• A substantial bequest to a charity of choice;
• Avoidance of the capital gains tax; and
• Significant income tax deductions.

The existence of permanent whole life insurance in the estate of a donor makes it possible to achieve the desired charitable intent with all the collateral benefits while providing an intact transfer of estate assets to heirs.