Life Insurance And Your Estate Plan
Most people understand the need for life insurance, but not everyone knows that this insurance is also a very important element to a solid estate plan. Life insurance will come into play with your estate plan in a couple of different ways.
When you purchase life insurance there are some things that you will want to consider.
Your Need for Life Insurance Obviously one of the first things that you will want to consider when you purchase your life insurance is what your needs are. One of the most common reasons that people purchase life insurance is that it helps their family financially if they should die. The ways in which life insurance can help, include replacing lost income, as well as providing money quickly to help pay for your final expenses, such as medical bills and the cost of a funeral. Keep in mind that someones final arrangements can be very expensive.
The Smart Way to Use Life Insurance When you purchase life insurance you can setup an estate plan that will ensure that your loved ones receive this money without the major tax liabilities that come with inheritance, such as estate tax and income tax. The best way to do this is to setup an estate plan that includes an Irrevocable Trust; with this type of plan the Life Insurance Trust buys the Insurance, and when you die it passes to your beneficiaries. A Life Insurance Trust is sometimes better than an IRA or 401K, due to the fact that these types of assets will be subject to taxes before passing to your beneficiaries.
Reviewing Your Life Insurance Policy When you purchase a new life insurance policy you will want to review it to ensure that you are getting the amount of coverage you need, for the lowest premium available. You will also want to review existing policies on a regular basis to make sure that you are covered, and that you cannot find more coverage for the same price. If you are not familiar with life insurance policies and other financial matters, it is best to hire a financial planner to help you with your life insurance purchase, as well as regular reviews of your benefits.
A good estate plan should include life insurance policies. With life insurance you can help to relieve the immediate financial burden that your family will deal with when you die, plus you can rest knowing that your family will be taken care of, even if you are not around to do it.
When you purchase life insurance there are some things that you will want to consider.
Your Need for Life Insurance Obviously one of the first things that you will want to consider when you purchase your life insurance is what your needs are. One of the most common reasons that people purchase life insurance is that it helps their family financially if they should die. The ways in which life insurance can help, include replacing lost income, as well as providing money quickly to help pay for your final expenses, such as medical bills and the cost of a funeral. Keep in mind that someones final arrangements can be very expensive.
The Smart Way to Use Life Insurance When you purchase life insurance you can setup an estate plan that will ensure that your loved ones receive this money without the major tax liabilities that come with inheritance, such as estate tax and income tax. The best way to do this is to setup an estate plan that includes an Irrevocable Trust; with this type of plan the Life Insurance Trust buys the Insurance, and when you die it passes to your beneficiaries. A Life Insurance Trust is sometimes better than an IRA or 401K, due to the fact that these types of assets will be subject to taxes before passing to your beneficiaries.
Reviewing Your Life Insurance Policy When you purchase a new life insurance policy you will want to review it to ensure that you are getting the amount of coverage you need, for the lowest premium available. You will also want to review existing policies on a regular basis to make sure that you are covered, and that you cannot find more coverage for the same price. If you are not familiar with life insurance policies and other financial matters, it is best to hire a financial planner to help you with your life insurance purchase, as well as regular reviews of your benefits.
A good estate plan should include life insurance policies. With life insurance you can help to relieve the immediate financial burden that your family will deal with when you die, plus you can rest knowing that your family will be taken care of, even if you are not around to do it.
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