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What is

Juvenile Life Insurance?

Juvenile Life Insurance is a tax-advantaged financial product that insures the life of a child. It provides cash value accumulation, tax-deferred growth, and guaranteed insurance for life.

The policy can be fully funded in five years or less and secures guaranteed lifetime coverage at the lowest cost of insurance. The policy's accumulated cash value can be used to pay premiums, eliminating the need for further out-of-pocket contributions. The owner can withdraw or borrow from the cash value at any time, for any purpose.

Juvenile Life Insurance can be used to accumulate and transfer significant wealth to your loved ones - estate, gift, generation-skipping and income tax free.

Parents and grandparents can select between whole life or indexed universal life.

Whole Juvenile Life is permanent whole life insurance that increases by a minimum guaranteed interest rate, plus a non-guaranteed dividend declared annually by the insurance company.

Indexed Juvenile Life is permanent universal life insurance that has cash value increases linked to the performance of an equity index (e.g., S&P 500) up to a certain percentage (a "cap") with downside protection (a "floor").

What is

Whole Juvenile Life Insurance?

Whole Juvenile Life is permanent whole life insurance that increases by a minimum guaranteed interest rate, plus a non-guaranteed dividend declared annually by the insurance company. New Amsterdam Life's Whole Juvenile Life products offer performance guarantees backed by top-rated insurance companies that have been in business for over a century and have never failed to pay an annual dividend.

What is

Indexed Juvenile Life Insurance?

Index linked Juvenile Life Insurance has cash value increases linked to the performance of an equity index (e.g., S&P 500) up to a certain percentage (a "cap") with downside protection (a "floor").

To learn more about Indexed Juvenile Life Insurance, click here

What is cash value?

The cash value of Juvenile Life Insurance is the portion of your annual contribution (including guaranteed interest and non-guaranteed dividends) that grows tax deferred over time.

The cash value of Juvenile Life Insurance can be withdrawn or received as a guaranteed loan at any time, without a credit check or lender approval. A policy owner will typically receive the withdrawal or loan amount requested in less than seven days, providing an easily accessible source of liquidity. If the policy is held within a trust, funds can be requested and distributed for any purpose permitted by the trust.

What is face value?

The face value of Juvenile Life Insurance is the sum paid by the insurance company to a beneficiary upon the death of the insured.

What is a non-guaranteed dividend?

The insurance company determines how much of its surplus should be distributed to policy owners in the form of annual dividends. While future dividends are not guaranteed, an insurance company's past performance is an indicator of how it rewards its policy holders. You can also evaluate an insurance company's credit rating. Independent rating companies such as A.M. Best, Moody's, Standard & Poor's, and Fitch rate insurance companies on financial strength, stability, and claims-paying ability.

Is a medical exam required?

A medical exam is normally not required and coverage is guaranteed for life, regardless of the future insurability of the child. Most policies also offer an option to purchase additional insurance in the future without medical underwriting.

Why should I consider

Juvenile Life Insurance

for my child's college education?

Juvenile Life Insurance is a flexible tax-deferred savings vehicle. It offers a competitive rate of return and the policy owner can withdraw or borrow from a Juvenile Life Insurance policy to help pay for college. After college, the student has a policy in place, for life. The cash value of a Juvenile Life Insurance policy is not included in a federal needs based financial aid assessment.

How does

Indexed Juvenile Life Insurance

compare to investing directly in the stock market?

To see how Indexed Juvenile Life Insurance compares to other investments, click here

When used for college savings, how does

Juvenile Life Insurance

compare with a life insurance college plan provided by a well-known insurance company?

The example below shows the projected return at age 18 of a Juvenile Life Insurance policy issued by an A++ rated carrier for a 1 year old female compared to the return of a life insurance College Plan offered by a well-known insurance company.

Juvenile Life Insurance: Make annual contributions of $3,600 for 17 years (totaling $61,200) and receive a projected return of $83,452 when the child is 18 or transfer the policy to the child who will own a fully paid whole life insurance policy for life. The child will have a minimum of $427,168 insurance coverage, increasing to $995,175 at age 18. The policy owner can choose to maintain coverage for life, regardless of insurability.

College Plan (Other Carrier): Make annual contributions of $3,600 for 17 years (totaling $61,200) and receive $70,764 when the child is 18. The parent has insurance coverage of $70,764 until the child reaches age eighteen, when coverage terminates.

Why should I consider

Juvenile Life Insurance

as a wealth transfer and estate reduction tool?

Recent federal tax law changes have created exciting new opportunities for tax-advantaged wealth transfer. The often overlooked annual gift tax exclusion is one of the simplest ways to transfer wealth to loved ones rather than to the IRS. For 2011 and 2012, in addition to the annual $13,000 gift tax exclusion, each donor enjoys a lifetime gift tax exemption of $5 million (up from the $1 million exemption for 2010). For 2011 and 2012, the generation skipping tax (GST) exemption has increased from $1 million to $5 million.

The increase in the GST exemption, along with the increase in the gift tax exemption, provides affluent families with an opportunity to purchase Juvenile Life Insurance for children and grandchildren and transfer significant wealth without current taxes and avoid estate taxes from being imposed on future generations.

The 2010 tax bill also raises the individual estate tax exemption to $5 million. For individuals seeking to further reduce their taxable estate and ensure responsible management of the insurance policy, a parent or grandparent can create an irrevocable life insurance trust to own the policy and designate a trustee to manage the account for the beneficiary.

What if I do not (or cannot) make required contributions?

If you do not (or cannot) make required contributions, the existing cash value will be used to fund the annual premium until you are able to resume required contributions. If there is no available cash value, the policy may lapse. However, we will work with you and the insurance company to review all available alternatives, including maintaining your policy at a reduced face value.

Are there any coverage limitations or restrictions?

Generally, carriers require a parent to have life insurance coverage for him or herself before purchasing Juvenile Life Insurance. A child can typically be insured for up to half of the coverage in place on a parent. If a parent is uninsurable or a grandparent is purchasing a policy, fewer coverage limits apply.

What are the risks of a Juvenile Life Insurance policy?

The safety and security of a Juvenile Life Insurance policy is based on the financial strength of the insurance company issuing the policy. Independent rating agencies such as A.M. Best, Moody's, Standard & Poor's, and Fitch rate insurance companies on financial strength, stability, and claims-paying ability. New Amsterdam Life only offers products from highly rated insurance companies that have been in existence for at least a century and hold one of the two highest ratings (A+) or (A++) by A.M. Best.

What are the tax consequences of a withdrawal or loan from a policy?

There are two ways of accessing cash value from a policy: a withdrawal or a policy loan. Withdrawals are tax free up to basis (the total of contributions made to a policy). Withdrawals over basis are considered taxable income.

A policy loan is not treated as taxable income as long as the loan is repaid. If the repayment of the loan does not occur within the insured's lifetime it must be repaid by the policy's face value. The only collateral for the loan is the policy itself. The insurance company sets the interest rate for policy loans at policy inception.

Are the proceeds of a Juvenile Life Insurance policy subject to taxes?

The proceeds of a Juvenile Life Insurance policy are generally income tax free to the named beneficiary or beneficiaries. If held by a trust, the proceeds are not included in the taxable estate of the insured. A parent who owns a policy on a child may exclude the cash value of the policy from his or her estate by transferring the policy to the insured or to a trust.

What are the tax consequences of a transfer of a Juvenile Life Insurance policy?

A transfer of a Juvenile Life Insurance policy from one individual to another (other than a spouse) while receiving nothing, or less than full value in return is considered a gift, and may be taxable to the donor.

The donor may wish to make use of his or her annual gift tax exclusion or lifetime gift tax exclusion.

The donor may transfer a Juvenile Life Insurance policy to avoid having the cash value of the policy included in his or her taxable estate. The policy owner may transfer the policy to the insured so that withdrawals over basis are assessed at the presumably lower income tax rates of the child.

What is the application and approval process?

The application and approval process for Juvenile Life Insurance is simple and typically takes less than six weeks. A medical exam is generally not required.

You can begin the process by taking a moment to complete our online Application Request form. Within 24 hours after we receive your request, we will prepare a client-specific illustration from a top-rated carrier and send you a full application for you to complete and return. You will authorize us to obtain a copy of the child's medical records. This information is kept strictly confidential. Upon receipt, we will submit a full and complete application to the insurance company on your behalf. We will track the progress of your application and keep you updated regularly. Once approved, we will send you a final copy of the policy for your records. You will confirm delivery in writing and submit your first premium payable directly to the insurance company.

Why should I use New Amsterdam Life?

New Amsterdam Life is the leading Juvenile Life Insurance agency in the United States. We offer a comprehensive portfolio of Juvenile Life Insurance products from the top rated insurance companies in the United States.

New Amsterdam Life has unparalleled experience in the selection, structure and customization of Juvenile Life Insurance. As an independent agency, our goal is to help you select the right type and amount of insurance for you and your family. We structure our Juvenile Life Insurance policies to maximize cash value growth.

Our professionals are paid a salary, not a commission. There is never any sales pressure or unwanted phone calls. We provide the highest quality service before, during and after the sale of a policy.

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