Estate planning and life insurance
Let’s start with a definition of estate planning: Estate planning includes the steps to set up what you or you and your spouse do with your assets after death. Proper estate planning includes steps to minimize legal and financial problems, avoiding excessive fees and expenses and the resolution and minimization of taxes. That’s quite a mouthful but the bottom line is to pass on your assets to whom you want, with the timing you decide, with as little complexity as possible at the same time while maximizing the dollar amount given to your heirs.
How does life insurance fit into the picture? Well, life insurance has to do with money arriving when someone dies so it is an interesting estate planning tool. The most common use is to purchase life insurance to pay the taxes and fees that will be due. Buying life insurance in advance is a recommended planning strategy in that you’re “buying” the dollars at a discount in advance, pre-paying a known cost. A common type of life insurance policy used for estate planning is survivorship life insurance which pays after two people (usually spouses) both die.
This kind of life insurance has several different names including: second to die life insurance, joint and survivor life insurance, last survivor life insurance or survivor life insurance. The reason that Survivorship life insurance is used is that estate taxes can be delayed for a married couple until both have died. To learn more about this you can go to the lifeinsure.com page about survivorship insurance.
You can also receive a complimentary market search done to obtain the best survivorship life insurance quote for you.
