Protecting the Life You're Building

Building a strong financial future is a lifelong journey that requires strategic planning and sound decision-making. For women and veterans, unique financial challenges and opportunities make it essential to adopt smart financial strategies. While earning and saving money is crucial, protecting what you have built is equally important. Unexpected events such as illness, job loss, or economic downturns can threaten your financial stability. By incorporating living benefits, indexed accounts, tax-free income strategies, and generational wealth planning, you can create a safety net that ensures long-term security for yourself and your loved ones.

The Power of Living Benefits

When people think about life insurance, they often associate it with a death benefit—a payout that helps loved ones after the policyholder passes away. While this is a crucial component, modern life insurance policies offer much more through living benefits. Living benefits allow policyholders to access a portion of their death benefit while they are still alive if they experience a qualifying event, such as a terminal, critical illness, critical injury, or chronic condition.

How Living Benefits Work

Living benefits provide financial relief during difficult times by allowing policyholders to use funds for medical expenses, loss of income, or other financial needs. This feature can help avoid draining savings, selling assets, or falling into debt due to unexpected health crises. Policies that include living benefits can be an essential tool for maintaining financial stability and ensuring that life's unexpected challenges do not derail your long-term plans.

Medical Bankruptcy in the U.S.

Medical debt continues to be a significant issue in the United States, affecting millions of individuals and contributing to financial instability. As of December 2021, approximately 20 million people, or nearly 1 in 12 adults, had medical debt. Notably, around 14 million people (6% of adults) owed over $1,000, and about 3 million people (1% of adults) had medical debt exceeding $10,000. The total medical debt in the U.S. was estimated to be at least $220 billion at the end of 2021. This substantial financial burden underscores the critical need for effective financial planning to protect against unforeseen medical expenses.

Key Advantages of Living Benefits

• Medical Expense Coverage: Helps cover treatments, home healthcare, and long-term care.

• Income Replacement: Provides financial support if an illness prevents the policyholder from working.

• Debt Prevention: Avoids depleting retirement savings or accumulating medical debt due to health-related issues.

• Flexibility: Can be used for various expenses, including mortgage payments, utility bills, and family support.

For women, who often take on caregiving roles that may impact their career earnings, and for veterans transitioning to civilian life, living benefits offer essential financial security. These benefits ensure that any health challenges do not become long-term financial burdens.

Indexed Accounts: A Strategic Approach to Growth and Protection

Investing in indexed accounts is another powerful way to grow & protect wealth. Indexed accounts, such as indexed universal life (IUL) insurance and indexed annuities, are financial products that tie their returns to a stock market index, such as the S&P 500. These accounts offer a unique blend of growth potential and downside protection, making them an attractive option for long-term financial security.

How Indexed Accounts Work

Indexed accounts allow policyholders or investors to earn interest based on the performance of a market index. Unlike direct stock investments, indexed accounts come with a floor that prevents losses even if the market declines. This means that when the market performs well, the account benefits from gains, but when the market declines, the policyholder’s principal remains protected.

Benefits of Indexed Accounts

• Market Growth Potential: Gain exposure to stock market performance without the risk of direct investment losses.

• Principal Protection: A built-in floor ensures that account value does not decrease due to market downturns.

• Tax Advantages: Many indexed accounts grow tax-deferred, allowing wealth to accumulate faster.

• Lifetime Income Options: Some indexed annuities provide guaranteed income streams, making them valuable retirement planning tools.

• Tax-Free Income: Indexed universal life (IUL) insurance policies allow for tax-free loans and withdrawals, providing financial flexibility without tax burdens.

For women, who statistically live longer and may need more retirement savings, and for veterans who may have military pensions but need additional financial security, indexed accounts offer a way to grow wealth while minimizing risk.

Building Generational Wealth: Securing a Legacy

Creating financial stability for future generations is one of the most meaningful financial goals an individual can pursue. Generational wealth refers to assets, investments, and financial knowledge passed down to children and grandchildren. Without proper planning, wealth can be lost in a single generation. By strategically managing assets and utilizing financial tools such as trusts, insurance policies, and investment accounts, families can ensure a lasting legacy.

Steps to Building Generational Wealth

1. Invest in Appreciating Assets

• Real estate, stocks, and businesses are assets that can grow in value over time, creating a foundation for generational wealth.

2. Leverage Life Insurance

• Permanent life insurance policies provide a tax-free inheritance, ensuring that wealth is transferred efficiently to heirs.

3. Teach Financial Literacy

• Educating children and grandchildren about budgeting, investing, and wealth management ensures that they can sustain and grow inherited wealth.

4. Establish Trusts and Estate Plans

• A well-structured estate plan can protect assets from excessive taxation and ensure that wealth is distributed according to family wishes.

5. Utilize Business Succession Planning

• For entrepreneurs, establishing a clear business succession plan helps keep the family business intact and thriving for future generations.

The Long-Term Impact of Generational Wealth

For women, building generational wealth helps bridge income gaps and provides financial security for children and grandchildren. For veterans, passing down military benefits, investments, and financial knowledge can ensure a strong financial future for their families. By implementing generational wealth strategies, families can break cycles of financial hardship and provide their heirs with greater opportunities. This may include funding higher education, supporting entrepreneurship, or ensuring financial independence. The key is to be intentional about wealth preservation and to make decisions that benefit not just the present, but future generations as well.

Final Thoughts

Protecting the life you’re building requires a proactive approach to financial planning. By leveraging living benefits, indexed accounts, tax-free income strategies, and generational wealth strategies, individuals can safeguard their assets, provide for their families, and ensure long-term financial stability. These financial tools not only protect against the unexpected but also create opportunities for wealth accumulation and legacy building.

For women and veterans, these financial strategies are even more crucial in overcoming unique challenges and ensuring long-term security. Whether you are just starting on your financial journey or looking to refine your existing plan, taking steps to secure your future today can create a lasting impact for generations to come.