“Legacy, legacy, legacy, legacy / Black excellence baby, you gon' let 'em see” - Jay- Z

We are in the middle of National Life Insurance Awareness Month and I remember working on one of my biggest campaigns a few years ago that was focused on shifting the narrative about Life Insurance from being only about death to shining a light on it. Not only is Life Insurance important for those who transition from this world, but those left behind to continue their legacy. 

Legacy and generational wealth has become two of the most interchangeable topics as of late and it is critical for more of us to do. Why? Because as a culture, we are often under insured or lack any form of burial/life insurance. GoFundMe isn’t a form of life insurance, Fam.

With speaking to one of my couple clients a few weeks ago, they ran down their estate plan that they had established at the top of this year. They had a majority of the basics covered - Will, Trust, Health POA, Beneficiaries, etc. While I was hella proud, I was remiss to think back to The Black Dollar article that I wrote a few months ago when all sorts of companies showed their support of Black Lives Matter. 

“My stake in Roc Nation should go to you / Leave a piece for your siblings to give to their children too / TIDAL, the champagne, D'USSÉ, I'd like to see/ A nice peace-fund ideas from people who look like we”

That article highlighted all sorts of statistics and strategies for us to progress more as a culture. But, one of the things that I left out was the call for creating some sort of legacy/generational plan. I waited until this month to pick up the conversation about Black Wealth when it comes to Life Insurance and creating some sort of plan. 

Live Your Life - 

When looking into Life Insurance, keep in mind the 4 types to consider for when building your Legacy Plan: 

• Term: This is often the more affordable out of all of these options! Depending on the riders on your policy, if you outlive it -  you could not receive any death benefit. For some term policies within the life of the policy, a term life insurance may be convertible to a whole life insurance policy.  This is known as a “term conversion“.  The value of the term conversion is the fact that no further underwriting is needed in order to convert the policy to a whole life policy. 

• Whole: Just as the name says, this type of policy is intended to last for your ‘whole life’. Not only do they generate cash benefits, they also are eligible to receive dividend payments. Whole life insurance policies also allow for loans to be taken against the cash value of the policy.  You could also take out loans that can be taken for any reason and can be paid back. These types of policies can even be used as funds for generational trusts.

• Universal Life: While this type of policy sounds hella fancy, the difference between whole life insurance and universal life insurance is that universal life insurance has a flexible premium structure. If you are looking for flexibility within your legacy planning, this is a policy to peep out. This policy also has a cash-value account, but the insurance charges are pulled from the cash value account each month.  Any amount paid into the policy in excess of the cost of insurance is added to the cash value. The cash value then grows at a rate determined by your carrier’s performance and interest rates, with a guaranteed minimum of 2% annual growth. Dope, right? Like ‘Whole Life’, you could also surrender it for cash value, or loans and withdrawals. 

• Variable Universal Life: The only big difference between Universal Life and Variable Universal Life is that variable universal life insurance has a cash value account that does not pay a fixed or guaranteed rate of return. Dassit. That said cash value is invested in variable “sub-accounts” within the life insurance policy.  What these sub-accounts are essentially mutual funds, which represent investments in different asset classes. You can decide which account types your policy is tied to. The growth (or loss) of the cash value is dependent upon the market performance of the variable accounts. Depending on how the market performance determines how your sub-account grows. Risk factor here.These policies do allow for loans or withdrawals, and the policy can be surrendered for its cash value at any time.

Hold Up  - What’s a rider?! 

You might’ve noticed me mention this term (‘rider’) a few times, so let me give some insight into what they are. Think of yourself going to purchase something and the place you are purchasing from tells you about the ‘extras’ you can get to make that thing you are purchasing much better. That’s a rider! You have to pay for that ‘extra’ ting. Some popular ones are: Accelerated death benefit insurance rider, Return of premium insurance rider, Term conversion insurance rider, etc. Depending on your insurance carrier, the riders might change or be more enhanced. 

Depending on how you layer your Legacy Plan, you could find yourself using multiple of these legacy vehicles to help your family drive into a better future. Even if you don’t have the wealth of those we read about online, you can use them as leverage to build your own plan for future generations to expand. Even creating a “Trust” is something impressive to do. Hey, did you know that a couple of Family Trusts were some of the early investors to companies like Uber?

Why Am I Talking About This?

Due to the fact that I want us to start taking our legacy planning more seriously as a culture. GoFundMe, Fish Fry Dinners and T-Shirts with clouds should be the last thought our families should have when we pass away (heck not even thought about). I want us to tot have things in place that make the grieving time less stressful.

Fact - Keep in mind to reach out to a licensed insurance agent to help you construct your Legacy Plan. The purpose of this article is to introduce the concept to you. Along with letting you know how obtainable it is to plot x plan!

“Generational wealth, that's the key” 

Another thing to keep in mind - don’t just rely on the life insurance provided by your place of employment. If you leave the company, that policy leaves you. Most employer-based policies don’t carry over like rollover minutes. Having multiple policies isn’t just for the affluent, it is for the affordable like you and me! Wealthy isn’t out of reach for you, Fam! Expand your mind and expectations to see elevation. 

Tea - You can do your policies like you do your money.. Give each one a job! One policy can be for burial, one can be for settling the estate, etc. Go back to configuring how wealth looks for you and your family - not just now, but also in the future.

Additional insight - 

• Take your emotions out of it. While it is hard to think about our transition, the wealth transfer is important for us to organize it. 

• Audit your life now and in the future. Every so often, look to update your Legacy Plan to make sure that it is up-to-date.

“My parents ain't have shit, so that ship started with me / My mom took her money, she bought me bonds /

That was the sweetest thing of all time, uh”

As I love to say frequently - “The scale is within the start.”  Start how you can and expand with ever gain. What is in your Family Legacy Plan?

This article was featured over on CapWay! Take a read here!