By Essence·Updated November 16, 2023
You’re going in a million directions—from the school pick up line to grabbing groceries to a work call, and you haven’t even thought about dinner yet! You may feel like you don’t have time to figure out your finances, but we’ve got you covered. That’s why we’ve got some education on how you can put life insurance to work for you now and reap the benefits later.
Understanding Generational Wealth
To get started we asked Candice Darien, Life Regional Vice President at Nationwide, and Siedah Garrett-Guess, Founder of Young & Financially Lit, to define generational wealth for us. “Generational wealth is transferring your assets, possessions, and wisdom to the next generation,” says Candice. And Siedah says it can represent time, options, and freedom. “Generational wealth means leaving steppingstones so that the next generation doesn’t have to repeat the same financial struggle, but they can achieve at the next level,” she says. “Having a plan in place allows our next generation to break the cycle of dealing with the same financial struggle as the generation before them.”
Candice goes on to say, “I believe we have an obligation to empower the next generation. I think that’s very natural in our community, that we want to see our children have more resources and options than we’ve had.” And Siedah agrees, “We can change the narrative to say how we’ve maintained what it is they’ve built for generations to come. This is our opportunity to transfer wealth and build legacy but do it with standards around faith, values, education, traditions, and skills.”
Fulfilling Life’s Needs Now
Did you now that permanent life insurance not only funds a tax-free death benefit, but a cash value account that can be used to pay off an outstanding mortgage balance, help you fund higher education, and even pay off debts? It’s true. “I love looking at life insurance planning as a beautiful tree. Having a plan is the seed. Premium contributions and consistent yearly reviews are the watering and fertilization needed to help grow a healthy plan” says Candice. “Of course, there are death proceeds if you pass away, but there are also tax advantages. A cash value insurance plan allows you to take income tax-free distributions. I can also contribute more to retirement than my 401(k) or Roth IRA allow. In the future, I have options to withdraw or take a small interest rate loan.”
Siedah adds that life insurance is exactly that—for your life. “If you have dreams of retiring early—life insurance can be a steppingstone, because it doesn’t carry age restrictions on distributions,” she says. “It can help you start a business. It can give you access to cash without facing barriers you may face at a bank.”
Looking at the Long Term
According to Siedah, many people end up spending down what they’ve built up financially to help cover medical expenses and to help cover long-term care needs. And many of us don’t realize how expensive healthcare can be, especially if we’ve had a lot of these benefits covered through an employer. This is why long-term care is important, especially when you’re talking about building and creating generational wealth.
“There is a way to leverage dollars today to have a plan that is separate from your retirement plan, your dream vacations, your legacy planning,” says Candice. “I like that long-term care is not your grandma’s plan. It has improved over the years, and we have long-term care tied to a life insurance policy.” This is a great option if you want to have additional monies coming in without spending your assets or entering state Medicare spend down programs. “When it comes to long-term care planning, people can feel protected knowing they don’t have to spend all of their hard-earned assets on doctors and healthcare because they got sick—something they can’t control,” says Siedah. “You can have a plan to make sure your legacy continues, and your wealth makes it to the next generation.”
These are real-life examples of how people use life insurance and long-term care planning to ensure future generations thrive. Have a conversation with a financial professional to who can help you find a plan that fits your life now and for years to come. You can reach Siedah at www.youngandfinanciallylit.com.
Nationwide and Young and Financially Lit are separate and non-affiliated companies.
