Did you know that life insurance can be used as a tool in estate planning? By purchasing a permanent life insurance policy, you can provide immediate, tax-free money to your beneficiaries – and ensure that they have the funds necessary to cover your estate taxes.
Here are some reasons life insurance should be a part of your estate planning:
Settling the Estate: Funds from a life insurance policy can provide your family with the money necessary to settle an estate. Otherwise your family may not be able to find the funds necessary to pay the costs that go along with the estate-settling process.
Leaving a Legacy: Life insurance allows you to leave your family a legacy that is paid quickly and free of tax. This helps prevent money from being held up in probate and the costs that go along with it.
Inheritance Taxes: Life insurance proceeds can also help your family pay inheritance taxes that the state may impose on property your family inherits.
Reducing the Size of Your Estate: Using a gifted whole life insurance policy that is paid in fully with a single premium will immediately reduce the size of your estate and avoid taxes on your premium dollars paid.
With life insurance, you can be certain that your family will be taken care of after you are gone. Contact our office to discuss setting up a Single Pay Whole Life insurance policy as part of your estate plan.
NOTE: Consult your legal or tax adviser for specific tax advice.
SOURCE: Auto-Owners Insurance Update, Volume 8, Issue 3, July – September 2014