Why Generational Planning Matters

Leaving a financial legacy isn’t about accumulating riches—it’s about stewarding God’s resources to bless future generations. Life insurance can play a key role in multigenerational planning.

Pacific Life notes that cash‑value policies can help protect generational wealth by allowing you to designate children or grandchildren as beneficiaries.

Because death benefits are generally income‑tax free, life insurance provides liquidity to pay estate taxes or equalize inheritances.

  • Provide for grandchildren’s education or ministry support
  • Equalize inheritances when assets are difficult to divide
  • Create liquidity for estate taxes or charitable gifts

Choosing the Right Policy

Term insurance may suffice for immediate obligations, but permanent policies like whole life or universal life offer cash value and flexibility.

Permanent policies can be owned individually or within an irrevocable life insurance trust (ILIT) to keep proceeds out of your taxable estate and provide continued stewardship.

Consult an estate planning attorney to determine whether an ILIT makes sense for your situation and to structure beneficiary designations wisely.

  • Whole Life: guaranteed death benefit and cash value
  • Universal Life: flexible premiums and death benefit
  • Term Life: temporary protection for specific debts

Trusts, Wills, and Beneficiaries

Without clear beneficiary designations, life insurance can pass outside of probate but may create family conflict. Establish a will and update beneficiary forms regularly.

Use trusts to direct how proceeds are used—for example, to provide for a special needs grandchild or to fund a scholarship at your church.

Keep copies of your policy and trust documents in a secure yet accessible location. Inform your executor and beneficiaries of your intentions.

Implementing Your Legacy Plan

Meet with a financial advisor and estate attorney who understand Christian values and can help integrate charitable giving with family inheritance.

Review your coverage annually as grandchildren are born or family circumstances change.

Communicate your plan to your children and grandchildren to foster unity and understanding.

Frequently Asked Questions

Can life insurance reduce estate taxes?

Yes. By providing liquidity outside of your taxable estate, life insurance can fund estate tax liabilities and maximize the amount that passes to heirs.

Should I purchase a policy on my grandchild?

Purchasing permanent insurance for a grandchild can guarantee insurability and accumulate cash value for future needs. However, your own coverage needs should come first.

What is an irrevocable life insurance trust (ILIT)?

An ILIT owns a life insurance policy and manages the death benefit according to trust terms. This can keep proceeds out of your taxable estate and control distributions to beneficiaries.

Disclosures: For educational purposes only; not tax, legal, or investment advice. Product availability, features, and rates vary by carrier, underwriting, and state. Crocker Financial is licensed in OH, SC, SD, VA, TN, and IN. Consult your professional advisors for personalized guidance.