LIFE INSURANCE – THE BEST INVESTMENT TO TRANSFER WEALTH

7 TIPS WHEN CONSIDERING A LIFE INSURANCE INVESTMENT

September 21, 2004--Cleveland, Ohio--What do Malcolm Forbes, Mark McCormack, and Cleveland billionaire Fred Lennon have in common? All were extraordinarily successful businessmen with very large estate taxes and liquidity problems when they died. Similarly, Joe Robbie sold the Miami Dolphins and the Wrigley’s the Chicago Cubs. What could they have done differently to finance the “death tax?”

Malcolm Forbes was quoted in the last year of his life that life insurance was the best way to deal with the transfer of wealth and ultimately the payment of estate tax liabilities. He was unable due to his age and timing to acquire the amount of life insurance he wanted. Cleveland billionaire, John Lennon, died with an estate tax liability of over $450 million. The Cleveland Plain Dealer reported there may be a need to sell Mark McCormack’s company, IMG, because of high estate tax liability.

“Often, emotion takes over intelligent decisions,” says Cleveland wealth counselor, Richard Tanner, President of Ownership Advisors, Inc. “Giving up control of certain assets while you’re living to finance the insurance when you die becomes an emotional powder keg. In addition, if you wait until later in life, the cost may be prohibitive because of health.”

Wealthy or not, life insurance is a popular way to protect your family’s finances.

Following are 7 tips to avoid costly mistakes when purchasing life insurance.

1) Don’t let company financial strength ratings influence your decision. Overly high ratings may mean the company is investing your premiums too conservatively which may translate to higher consumer costs.

2) Diversify insurance (select different carriers) as you would an investment portfolio.

3) Consider a policy that has a death benefit designed to keep up with inflation.

4) Be overly conservative in deciding the amount of insurance you need. You can always reduce your insurance but you can’t always increase it.

5) Don’t allow emotion to overtake your decision making process. Insurance is generally bought out of love and need, investments out of fear and greed. Fall in love with your family, not your life insurance investments.

6) Ask for a written explanation of all guarantees for the insurance policies proposed.

7) Flexibility or the ability to change the contract from term to permanent is important.

Mr. Tanner is a Registered Principal with and offers securities through Linsco/Private Ledger, Member NASD/SIPC.

Contact Richard Tanner at 216-328-5538 or at

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