Some consider life insurance a cornerstone in estate planning because of its guarantee nature. Life insurance offers guaranteed protection in the form of monetary benefits disbursed to an individual or individuals that policyowner chooses in order to pay off final expenses of the deceased, any other financial "threat" to the estate's wealth and/or maintain current lifestyle of the beneficiary.
In my opinion, estate planning that includes a life insurance product just makes sense.
Life Insurance is essential in estate planning for a variety of reasons. First, it provides an immediate death benefit that in most cases is very favorably taxed. It can also provide living benefits in some cases to help pay the cost of Long Term care. While it doesn't take the place of Long Term Care Insurance, a critical illness, accelerated death benefit, or long term care rider can certainly help with those expenses. There are a variety of other reasons for using Life Insurance in estate planning. Each case is different and requires a comprehensive look at your personal financial situation.
Agent Owner, Gilmore Insurance Services, Marysville, Washington State
In the simplest terms life insurance helps in estate planning because it creates a pool of money upon death. This money can be used for any purpose, but in most cases when estate planning is involved, it is used to pay estate taxes due. The main reason people do this is it allows other assets to remain untouched by the estate tax reach. Examples would be a business, investments, art work, real estate, etc.. that wouldn't have to be liquidated to pay estate taxes. So the easiest and simpliest way to look at life insurance in an estate plan is to pay off Uncle Sam so Uncle goes away. Nothing does it quicker or easier than life insurance.
Estate Planning doesn't have to be hard, people just make it that way.
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In my opinion, estate planning that includes a life insurance product just makes sense.
Estate Planning doesn't have to be hard, people just make it that way.