So you think you know all there is to know about cash value life insurance and how it fits into your retirement plans? Prepare to be surprised, as one of America’s top insurance experts, Kirkland-based Jim Feek, joins Rajiv in the studio on April 15th. Jim will be available to take your questions and to provide you with answers and insight you’ve probably never thought of before.
Jim is a financial services professional with decades of experience and deep roots in the Puget Sound area. He graduated from Tacoma’s Pacific Lutheran University and also did graduate work at the University of Washington. After a stint in the Army, Jim founded his own insurance and financial services firm called the James Feek Corporation, where as company CEO he served his many clients for 40 years. More recently, in 2008, Jim became Vice President of Private Client Services for Conover Life Insurance Services, one of the oldest and largest locally-owned independent insurance brokerages in the Pacific Northwest. Along with life insurance, Conover specializes in both commercial and personal insurance as well as in employee benefits.
Here at AgingOptions we want our clients, radio listeners and guests at our seminars to have useful information concerning all the tools at their disposal in planning for a financially secure retirement. Protecting your assets after you retire is at the top of the list for most of us when it comes to planning for our future. Jim brings nearly five decades of experience to the challenge of finding the best ways for retirees – and for people of any age – to accomplish their financial goals, and we hope you’ll call into the radio show this weekend with your questions. (Remember that all our radio programs are archived here on our website for future listening and for sharing with family and friends.)
There’s no doubt that cash value life insurance can be used in some very fruitful yet somewhat unexpected ways. For example, in preparing to join Rajiv on the radio, Jim shared with AgingOptions a fascinating study he produced for Conover showing how cash value life insurance had helped make one of college football’s biggest names, University of Michigan head football coach Jim Harbaugh, into college football’s top paid coach.
The “creative compensation plan,” as Jim Feek described it, that enriched Coach Harbaugh was widely reported (at least, in general terms) by several news outlets including Sports Illustrated. “What most people don’t know, however,” Feek wrote, “is that the compensation strategy was designed to provide Harbaugh with millions of dollars of tax-free cash during retirement. It’s one that can also be incredibly effective on a much smaller scale.” This creative deferred compensation plan involved cash value life insurance. In a nutshell, here’s how it is working for Jim Harbaugh.
Harbaugh’s employer, the University of Michigan, agreed to loan their head coach $14 million (paid in seven installments) which Harbaugh then used to pay premiums on a life insurance policy. The terms of the agreement between the university and their coach stipulate that the loan is not paid back until Harbaugh dies, at which time the school recovers its $14 million loan. Harbaugh’s beneficiaries will receive the balance of the insurance proceeds. But the benefit hardly stops there. While specific terms are of course confidential, Jim Feek’s analysis suggests that Coach Harbaugh will be able to purchase a policy with an initial death benefit exceeding $35 million. Starting at age 66 (Harbaugh is now 53), he’ll be able to start withdrawing approximately $1.4 million per year from the policy tax free!
There’s much more detail to the Harbaugh illustration, but the important take-away, according to Jim Feek, is that companies can use similar strategies for almost any executive to whom they want to offer deferred compensation. And by extension, some form of pre-paid life insurance may be exactly right for your situation, offering you protection for your loved ones and a source of tax free income. Once again, no single financial product is right for everyone, so we encourage you to listen to our radio program this weekend for the inside scoop on a powerful financial tool that many say is too often overlooked or misunderstood. Our prediction is that many listeners will start thinking about life insurance in a brand new way.
Maybe it’s time for you to start thinking about retirement planning in a brand new way. Beyond financial planning, a solid retirement plan includes housing, deciding how and where you want to live. It includes your legal documents, which means much more than your last will and testament. Your estate plan will be meaningless if it doesn’t take your medical needs into account, because few things will derail your plans like a medical crisis for which you have not prepared. Is there a type of retirement plan that includes all of these facets? Fortunately there is. At AgingOptions we proudly offer a unique and comprehensive approach to retirement planning called a LifePlan. Once you have prepared your LifePlan, you’ll be prepared for a fruitful and secure retirement. You’ll be able to protect your assets while ensuring that you won’t become a burden to those you love. It’s easy to find out more – and there’s no obligation whatsoever: simply plan now to attend one of our free LifePlanning Seminars. Invest just a few hours, and bring your questions – and your adult children if they’ll attend with you. It will open your eyes to the power of this unique, powerful planning strategy.
For a list of upcoming seminars, including online registration, click here, or call us during the week and we’ll be happy to assist you.