Life Insurance as a Strategic Tool for Wealth Transfer and Tax Efficiency
With Christopher Hyman, Senior Director of Insurance Services at Centura Wealth Advisory
For high-net-worth individuals (HNWIs) and ultra-high-net-worth individuals (UHNWIs), life insurance is more than just a way to provide financial protection. It’s a versatile tool for preserving wealth, managing estate taxes, and ensuring a smooth transfer of assets to future generations.
At Centura Wealth Advisory, we specialize in crafting life insurance solutions tailored to your specific goals and financial situation. Our personalized approach ensures that you can feel confident about protecting your legacy and meeting your long-term objectives.
Life Insurance: A Critical Tool in the Wealth Management Toolkit
“As wealth grows, life insurance becomes another essential tool in the financial toolkit—helping preserve wealth, improve tax efficiency, and simplify wealth transfer.”
— Christopher Hyman, Centura Wealth Advisory
Managing significant wealth can get complicated. From tax challenges to protecting assets for future generations, the stakes are high. Life insurance isn’t just a safety net; it’s a key component in making sure your financial plans work for you and your family long-term.
Life insurance can provide liquidity when it’s needed most—such as covering estate taxes or ensuring a smooth business transition. By incorporating a tailored life insurance strategy, you can simplify wealth transfer and ensure your family’s financial security, even in complex situations.
Managing the Estate Tax Burden
For wealthy families, estate taxes can have a major impact. Federal estate taxes, along with state inheritance taxes, can reduce the amount of wealth passed on to the next generation. With the current federal estate tax exemption set to decrease in 2026—from about $28 million to $14 million for married couples—many families could face higher tax liabilities soon.
“Without proper planning, heirs could be forced into fire sales of businesses or properties to cover estate taxes due within nine months of a death.”
— Christopher Hyman, Centura Wealth Advisory
Life insurance can ease this burden. When structured correctly—such as through an Irrevocable Life Insurance Trust (ILIT)—the death benefit is kept outside of the taxable estate. This creates a tax-free pool of funds that can be used to pay estate taxes or other obligations.
This approach protects illiquid assets like real estate, businesses, or investments, ensuring that your heirs don’t have to sell valuable properties or companies at unfavorable prices just to cover taxes.
Custom-Designed Life Insurance Solutions
Not all life insurance policies are created equal. At Centura, we focus on designing plans that fit your financial structure and personal goals, rather than relying on cookie-cutter options offered by insurance carriers.
Our approach prioritizes:
- Cost Efficiency: We work to keep premiums low while maximizing benefits.
- Custom Structuring: Policies are tailored to meet specific estate and tax planning needs.
- Flexibility: Life insurance plans are designed to adapt as your financial situation or goals change over time.
This personalized approach ensures that you get the coverage you need, with the flexibility to evolve as your financial priorities shift.
The Risk of Waiting: Insurability Challenges
Life insurance works best when it’s secured early. Age and health play a big role in determining the cost of coverage—or whether you can qualify at all. Waiting too long to act can result in higher premiums or, in some cases, make it impossible to secure a policy due to health changes.
“Waiting can be costly. Health changes over time, and clients risk losing access to life insurance as a powerful estate planning tool.”
— Christopher Hyman, Centura Wealth Advisory
By acting sooner rather than later, you lock in lower premiums and ensure that life insurance remains a viable option in your estate planning toolkit. Even if health or age becomes a concern, there are creative strategies we can use to make sure your goals are met.
Is Life Insurance the Right Strategy for You?
Not every client prioritizes estate tax planning in the same way. Some feel strongly about preserving wealth for future generations, while others may not see it as a priority.
At Centura Wealth Advisory, we take the time to understand your priorities and values, crafting life insurance strategies that are tailored to your needs.
Here are some scenarios where life insurance can make a meaningful difference:
- Estate Tax Planning: Providing liquidity to cover tax liabilities without selling assets.
- Business Succession Planning: Ensuring a smooth transition of ownership and financial stability for family-owned businesses.
- Charitable Giving: Leveraging policies to support philanthropic goals in a tax-efficient manner.
- Asset Protection: Shielding wealth from potential risks or unforeseen expenses.
Ready to explore how life insurance can fit into your wealth strategy?
Contact Centura Wealth Advisory today to develop a custom plan that protects your wealth and secures your family’s future.
