Ideas, tips and news about life insurance and the uses of life insurance

Today, I saw an article about Using a Life Insurance Trust from The New York Daily News. In this article financial writer, Marshall Loeb, talks about the reasons for and the structure of an Irrevocable Life Insurance Trust (ILIT).

This is a trust that one sets up (with their attorney) to hold a life insurance policy. The purpose of the trust is that by doing so and properly using gifts using a method called “Crummey provisions” (not that they’re crummy – named after the case regarding a gentleman named Crummey) then the insurance benefit is received free of estate or income tax. When a couple is involved in an ILIT, Survivorship Life Insurance is often used. This type of life insurance policy does not pay its death benefit until both man and wife both are deceased. The reason for that is the estate tax can be delayed, and usually is, until both married individuals have passed away.

Also, Survivorship Life Insurance is less expensive than two separate policies. Lifeinsure.com searches the market with its relationships with the largest and most competitive life insurance companies for the best quotes for Survivorship Life Insurance.

For reference, this type of life insurance can be confusing in its name, it has several synonyms which are all synonymous with survivorship life insurance including: Second to die life insurance, Joint and Survivor Life Insurance, Survivor Life Insurance, Last to die life insurance and Second Death Life Insurance.

Life insurance is for those you love and it also can be for you. Here’s what I mean: First of all, you should have the maximum life insurance available, no matter the type of life insurance, to make sure that those you love are taken care of financially if you’re not there to provide financial security.

The second value to life insurance is to you while you’re living. If you have cash value life insurance such as whole life insurance you have the extra value of access to the cash value and a growth of cash value on a tax deferred basis. Well funded whole life insurance can have enough value to make withdrawals on a tax favored basis while maintaining the life insurance.

Also, thirdly, having life insurance can give one a “permission slip” to do other financial strategies. Because if you have life insurance when older you can make sure to leave your family an inheritance while “spending down” other assets. The strategists at lifeinsure.com can help you design the right plan so that you can have this permission slip after retirement.