When you think of life insurance you don’t immediately think of estate planning.
Likely, you only think of it as part of an income-replacement tool. But, indeed it can be a useful tool when it comes to estate planning.
The death benefit is actually very flexible. So, for those of you who think you can dump your policy after you retire, or think you have no use for an additional policy, think again.
Life insurance and estate planning
A life insurance benefit doesn’t just have to be a lump sum payment to your beneficiaries. Here are more uses for the benefit you may not have thought about:
- Funeral expenses and other final debts
- Estate taxes
- Donations to charity
As you can see, you can actually use a policy to cover the costs of settling your estate and final expenses. And using life insurance to leave a substantial gift to your favorite charity is an estate tax deduction. By planning ahead and using these strategies makes sure the assets you leave to your survivors aren’t lessened through taxes or other expenses.
Also, it is sometimes forgotten that proceeds from a life insurance policy don’t usually pass through probate. This can be incredibly important because probate takes six months or longer. So, your family won’t have to wait until the estate is settled to get the money from your policy to pay bills or whatever other use for which they require the money.
Protect your family’s future
Having a life insurance policy along with your will or living trust allows you to guarantee what you have intended to pass along to your family is what they get. It is important you consider a consultation with an estate planner and a licensed insurance agent.
Our staff at Expert Insurance Team can help you find the right policy for your family!