Before attaining significant wealth, the primary purpose of life insurance coverage is to protect the ones they love. Providing a safety net on financial contributors to the household protects that family's financial future should that wage-earner die prematurely.

It is not uncommon for these families to think that their life insurance needs will go down over time. Here in lies one of the biggest myths of life insurance planning ‑‑ that the benefit of keeping life insurance in force someday goes away.

The affluent family wakes up to realize that a life insurance need does not cease when your retirement saving goal has been reached. At this point, the need for life insurance takes on a different purpose ‑‑ tax planning. Life insurance as part of a family's estate and retirement plan becomes vital for two major reasons:

1. One of the most common vehicles to mitigate an estate tax is the use of permanent life insurance in a trust. A properly coordinated life insurance policy inside of an irrevocable trust can significantly reduce a family's estate tax burden.

2. In our current low interest rate economic climate, it is challenging for investors to find alternative asset classes that serve as a good proxy for fixed income and equities within their financial allocation. With yields as low as they are today, investors are having a difficult time obtaining any sort of fixed income investments with desirable yields. To add to this dilemma, if they were to go out and add money to a traditional fixed income portfolio, there could be significant resistance when interest rates inevitably begin to rise.

3. Wealthy investors continue to be the target of tax increases which hope to redistribute the wealth in our country. As the saying goes, "It's not what you make. It's what you keep." Today, life insurance is widely accepted as a vehicle which helps affluent individuals start to fight against these tax increases.

Therefore, the Affluent Insurance Advisor knows that permanent life insurance serves the dual purpose of serving as a proxy to their client's fixed income strategy while also providing the additional benefit of improving their estate plan.