Life Insurance For Estate Planning
Life insurance plays two roles in the job of estate planning. One is providing estate liquidity and two is enhancing the estate. The principal role of life insurance in estate planning is to provide funds to facilitate estate conservation. Clients can use life insurance policies to pay estate taxes and settlement costs rather than having to liquidate estate assets to pay these costs.
The most utilized life insurance product sold in this space is second-to-die life insurance This product was designed to pay at the second death since at the first death assets are passed through the unlimited marital deduction and other methods that may be established by your tax attorney. Many consumers consider cheap level term life insurance with a full convertibility feature to protect their health in future years. This feature will allow you to convert to a permanent product in the carriers portfolio at the same rate class you were issued for the original term policy purchased. The cost will be factored in at your current age. Many twenty year level term life insurance policies have the feature for the full term.
Estate planning is a part of the larger job of lifetime financial planning. So much wealth is exposed in the federal estate tax arena for lack of planning. We work our whole life to build an estate and then come to find that up to 50% of it is gobbled up for estate tax’s at the second spouse’s death through the unlimited marital deduction. In addition, the estate tax unified credit helps minimize the estate tax burden. Why not maximize your distributable wealth and transfer it to the beneficiaries in an appropriate way. You must retain a qualified attorney that specializes in the area of estate tax planning.
In short, it is very important to consult a tax attorney to map out your estate plan which will help determine if you have a life insurance need for liquidity purposes.
Alan Daniel has over 20 years experience selling life insurance and saving consumers money.
Tags: estate planning, life insurance
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Wednesday, January 30th, 2008 at 2:56 pm under
