What are some Advanced Life Insurance Strategies Out There for Me?

Choosing the right strategy over time minimize taxation as well as enhance estate and legacy for heirs.

There are several aspects of the legislation that make insurance planning highly effective and unique. These are:

  • Death benefits are paid out tax-free for a qualifying insurance product. You can also choose a locked-in stable death benefit that grows over time.
  • The money you invest in your life insurance policy grows at a compound in a tax-sheltered fund. Your wealth grows and compounds in your life without being taxed by the government.
  • The policyholder can invest extra money in their policies over time. They enjoy the benefits of tax-sheltered investment plans and can borrow money from their insurance tax-free.

Life insurance comes with several features like money leveraging that allows you to invest funds in your policy, minimize taxation at present and your future estate, and sometimes give tax-free income as loans.

Insured annuity concept

Equity Indexed Annuities

In this financial planning strategy, your assets get liquidated. The resulting funds are used to buy a prescribed life annuity contract well as an exempt insurance policy. Payments generated by the annuity will cover the life insurance premiums and all taxes on the annuity. The extra amount will supplement your income. Once you die, the heir/ charity is rewarded the gift by the insurance.

Charitable giving


You might plan to make charitable giving as part of your estate planning process. Your life insurance can play a very integral role in charitable giving. You can offset taxes when you choose to use a charitable gift taxes. Using this strategy, you leave your donations to charity choice and reduce or eliminate the taxable amount from the final tax return.

Tax planning 

financial planning

Life insurance is an effective estate and tax planning tool to fund the tax liability. You get tax-free cash when needed to pay future obligations. The heirs can’t lose their inheritance resulting from a large tax bill. They get the property left for them without hassle. 

Retirement plan funds life insurance strategy 

The retirement plan funds (IRAS and 401(k)s for wealthy individuals are taxed twice. It gets taxed as income and second as the estate tax. For example, consider Dave, who has $900,000 in his IRA. He can avoid losing a more significant percent to Uncle Sam upon his death by buying a second-to-die insurance policy with the $900,000. When Dave dies, the wife receives $3 million tax-free benefits.

Transfer current life insurance with cash surrender value policy to increase the death benefit

Consider Ellen with a 10-year-old-to-die policy worth $850,000 carrying a death benefit of $1.53 million. She can do a tax-free insurance policy exchange and increase the death benefits to $3.48 million with no extra charges.

The two-step annuity tactic

Mary buys a joint-life annuity at $2 million and gets $87,686 as long as she and her husband are alive. She uses the annual $87,686 to fund an $11.36 million second-to-die policy. Mary converted $1.2 million after-tax of the initial $2 million into $11.36 million. Mary and her husband got annuity and guaranteed death benefits.

Other life insurance strategies to consider

  • Giving money to keep up or improve the income of a surviving companion.
  • Giving liquidity for paying estate taxes and domain charges without liquidating the estate assets.
  • Giving access to death benefits while still alive as extra salary expected to pay for long-term recuperating care. 
  • Giving explicit tax-exempt “blessings” to grandkids for school instruction or other capital needs as they enter adulthood.
  • Making an effective expense arrangement to put something aside for retirement and get tax-exempt “Roth like” pay without the constraints of IRS or ERISA choices.
  • Shielding a business from the unforeseen demise of a key worker. 
  • Permitting a business to cut out, prize, reward, and keep officials with answers to accomplish extra remuneration, insurance, and retirement pay.

Common questions about advanced planning

question mark

How do I know if I need this type of financial planning?

There are few areas where life insurance makes more sense:

  • You need to use current resources, or a business, to your beneficiaries later on 
  • You need to reduce your beneficiaries of expenses they would cause by inheriting your home or business 
  • You are looking to leverage or expand a bit of your portfolio for tax-advantaged development

What type of advisor do I need to speak up with?

In most instances, you get information about this planning from your financial advisor, accountant, financial planner, or anyone who forecasts you can take advantage of your position in the future. If you choose this plan, you need to consult your lawyer, accountant, a financial planner to build the entire plan cohesively and efficiently.  

Is life insurance an alternative to my IRA/401(k)?

Cash value insurance can be viewed as a supplement to the traditional 401(k) or IRA plan. Retirement plans and IRA accept pre-tax dollars, reduces your annual tax bill, but the life insurance premiums get paid with after-tax dollars, and reduces your tax bill ideally.

Make sure proper planning is done to fit into your entire investment portfolio by providing different sets of benefits that you can’t when using other retirement-planning products. 

How do rich people use life insurance?

The rich protect their assets with life insurance premiums and proceeds tax. Proceeds from comprehensive life insurance can be used by heirs to clear tax bills for wealthy individuals.

Is whole life insurance good for high-income earners?

Whole life insurance comes with several tax advantages. The cash growth is completely tax-deferred. You can also withdraw from life insurance and take tax-free policy loans. 

Most business owners have it?

Life insurance can fund a sell/buy agreement in case of the entrepreneur‘s sudden death. Heirs will benefit from a key person insurance policy. This policy protects the firm from going under when the business person dies before a replacement is in place. Insurance premiums are deductible and business expenses.

“ We have been dealing with BeamaLife for more than ten years now. They have been great advisors to us in terms of advanced risk management. They also helped to put in place pension plan strategies for our partners. BeamaLife has always been extremely professional and very attentive to our needs. Our sincere thanks! ”

Mr. Merchant
Software Company Owner

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Regardless of the topic or question, BeamaLife has unique individuals with the right background to address my concerns. As a result, I have a much clearer understanding of how certain wealth creation strategies were the right fit for my company. I also have been able to take much higher income tax deductions for the corporation by implementing a plan set forth by Neil Jesani. They have maintained an unmatched level of professionalism during my interactions with them over the years.”

Mr. Peters
Software Company Owner, California

“BeamaLife was referred to me by my CPA for my pension plan funding. I also wanted to take care of my estate tax need. Neil and his team have done a superb job of creatively funding my pension plan, acquiring most cost-effective life insurance for our estate planning need with very minimum out pocket using velocity of money principle and putting my existing investment to second use. They also help us setting up all our estate planning documents.”

Dr. Martin
New Jersey

“BeamaLife has been a great advisor to us for many, many years. They not only helped us take higher income tax deductions but, also helped us organize our investment portfolio in an efficient manner. Through this relationship, we were able to create substantial wealth with the very low out-of-pocket expense. Neil Jesani from BeamaLife is very responsive, professional and extremely knowledgeable”

Mr. Sakaria
Multiple Pharmacy Owner, New York

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