Reasons for Keeping a Life Insurance Policy

Whatshould you do if you have clients who are empty nesters that have a cash-valuelife insurance policy purchased long ago? Here are some reasons to hold it instead of cashing out:

1. Life insurance proceeds can help replenish savings exhausted byretirement spending.
2. Descendants may like to inherit the tax-free proceeds.
3. Name a charity as the beneficiary or donate the policy.
4. Leaving the tax-free death benefit to the beneficiary may makebetter investment sense than taking out the accumulated cash value.
5. It may make sense to keep the policy in force, but borrow againstthe accumulated cash value.

See Kevin McKinley, Five Reasons to Keep a Life Insurance Policy,Wealth Management, Oct. 23, 2013.

Special thanks toJim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringingthis article to my attention.