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Assume your client has a block of money they intend to pass to their heirs. You could suggest an annuity, but annuities are subject to federal income taxes at death. This can result in as much as 35 percent of the death benefit going to the Federal government. Life insurance, however, is not subject to federal income taxes, making it an ideal vehicle for wealth transfer.
However, a challenge with most life insurance policies is the unknown and possibly very high cost of insurance. This inflated cost can cause a significant drag on performance that can, in some cases, cause the policy to fail. That’s why we created Symetra Complete Variable Life Insurance with a low-cost structure – making it one of the most efficient wealth transfer tools available for your clients.
Symetra Complete is designed to serve as an asset management vehicle blending the tax benefits and wealth transfer efficiency found in life insurance with the investment flexibility and growth potential of an annuity.
Using a daily calculation, Symetra Complete funds the minimum amount of death benefit needed to remain classified as life insurance.1 This helps minimize the client’s cost of insurance, while the rest of their assets have the potential to grow in selected sub-accounts.
Using Symetra Complete, your clients can receive asset protection, lapse protection and ultimately, a federal income tax-free death benefit transfer.2
Symetra Complete at work
Here are some real-life examples of agents using Symetra Complete to provide seamless asset management and wealth transfer for their clients.
Asset protection
An ER surgeon in Florida with over $10 million in investable assets approaches his advisor to devise a strategy to protect his assets and also avoid burdening his heirs with a heavy tax load. His advisor suggests Symetra Complete.
The doctor pays an initial premium of $10 million, and now makes ongoing annual payments of $500,000. His assets are protected, can continue to grow, and his heirs will receive a tax free death benefit in the future.
Lapse protection
A 70 year-old male has a $1 million face variable universal life (VUL) policy, with $200,000 in cash value in jeopardy of lapse if more money is not put in. He has no desire to continue funding it at a higher rate, nor does have the need for a $1 million death benefit.
Working with his advisor, the client completes a 1035 exchange to a Symetra Complete policy. Complete’s daily death benefit adjustment eliminates need for traditional “no lapse” guarantees. His policy now remains non-MEC and requires no more contributions. Plus, he has access to the policy’s cash value and he maintains a total death benefit of about $320,000. He has no risk of lapse unless interest accumulation on a loan exceeds his surrender value.
Tax protection
A retirement-age female client has a $500,000 annuity with $200,000 of basis. She retired comfortably enough that she will never need the money, but now realizes the tax consequences her heirs will face upon her passing.
Realizing the tax benefits of Symetra Complete, she liquidates her annuity, receiving $380,000 after taxes,3 and reinvests it in a Symetra Complete policy. With the new death benefit factor, her estate will now receive an inheritance valued higher than her original annuity, income tax-free.
Find out more
Symetra Complete is one of the most efficient ways to transfer wealth available today. It’s an efficient way to manage and grow what your clients have now, so it can be seamlessly transferred later.
If you’re interested in learning more, please visit the Symetra Complete Web site at www.symetra.com/complete, or contact the Symetra Sales Center at invest@symetra.com or 1-800-706-0700.
Symetra Complete is an approved Future Systems™ Life Model Design. Patent pending.
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