what_is_LegacyMiriam Websters dictionary defines the word Legacy as follows:

1: a gift by will especially of money or other personal property
2: something transmitted by or received from an ancestor or predecessor or from the past

That’s how they see it and that’s how most people understand it. But how does it relate to our everyday life as Insurance Advisors? A life insurance policy is an instant legacy that can be used in so many ways. It can be looked at as the continuation of income provided by a father or mother to replace the income they would have provided if not for a tragedy of some kind. It can also be used to pay off a mortgage and provide for a college education. That’s life insurance in its most simple form. But let’s look beyond that for a moment.

In a large majority of planning scenarios that we come across, we find that parents (Gen 1) are monetarily helping their children and grandchildren more and more. It’s simply harder today for their children to have what they had. It’s more expensive to live, incomes are dropping, college costs are soaring and the future does not look financially bright. Via life insurance, namely Second-to-Die Life insurance, we are seeing a large increase in sales that Gen 1 is looking to secure a lasting legacy so that their children & grandchildren are protected long after they are gone.

Small annual gifts are being utilized to leverage large legacies through life insurance proceeds. The legacies provided under the life insurance policies are certainly meaningful. There are psychological implications to this sale as well. A parent, knowing that their children are provided for so that they can have a comfortable life is a good feeling for most. Especially when you factor in grandchildren, who are usually the apple of the eye of most grandparents. Knowing that you can be responsible for a grandchild’s college education, paying for their wedding or the purchase of a new house is something of a lasting legacy. People want to be remembered and what better way to be remembered then to leave a legacy that can do so much.

In fact, there are some grandparents buying Joint Life Annuities with themselves and their grandchildren as the joint annuitants. Every year on the grandchild’s birthday, a new annuity payment is made to them. It’s a pretty interesting idea to know that every year when the check comes in, it’s from your grandfather or grandmother. A far cry from the $5 bill that was in the birthday card we would get in the mail as kids. And what’s interesting, because the joint annuitant is so young, it doesn’t cost a lot of money to set that up and will last a lifetime.

Bottom line, it’s a good idea to include the Legacy conversation when talking to clients, especially their Attorneys and CPA’s. They know what the client’s desires are and in a lot of cases their Gen 1 clients want to help their children and grandchildren. As we near the end of the year and tax season is around the corner, you might want to start some of these conversations now.

I’ll leave you with this. I came across an old Greek Proverb and thought it was fitting as it relates to this topic…

“A society grows great when old men plant trees whose shade they know they shall never sit in.”

If you think of all your clients and prospects, you should yield lots of forests in the years to come.

Mark Milbrod

About Mark Milbrod

Mark’s Barks Blog is authored by Mark Milbrod, the Principal of our New Jersey Sales Office. Mark brings over 30 years of experience to his insightful commentary on the insurance industry. Through his Blog posts, you will learn about new sales trends, be educated on selling techniques and overall, think differently about your role as an insurance professional.

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