When it comes to life insurance, we built our agency around term life insurance. It’s simple and understandable, and designed for you and your family, not the agents selling it.
Term life insurance works best in your prime earning years; to cover the sudden loss of income in the event of your passing. The long-term goal is to invest the difference into your retirement plan and eventually self-insure this risk.
There are many ways in which a term life insurance policy can become an integral part of your financial well-being and big picture goals. Better understanding other key pieces in your estate planning can go hand-in-hand with your loved ones financial future.
What Is Estate Planning, Who’s It For?
Estate planning is the preparation that determines how your assets will be dispersed upon your incapacitation or death.
Many components make up your estate, but the most focused pieces can be broken down into two main categories: property and financial products.
Property includes real estate, cars, and other valuables. Financial assets include stocks, bonds, savings, and life insurance.
Estate plans can minimize the amount of taxes your family will incur after inheritance. While it is perceived as a complicated process, estate planning is a must, even for those who feel they have little to leave behind.
Is Life Insurance Part Of My Estate?
This answer might seem a little confusing at first, so let’s break down what we know.
The life insurance death benefit is not intended to be part of your estate because it is payable on death. It goes directly to the beneficiaries named in your policy when you die, avoiding the probate process.
If you can, avoid probate for your family. This lengthy and often costly series of procedures sorts through the deceased’s estate, including debt and credit lines. By naming a beneficiary, the funds of the estate belong solely to the named recipient. This means the court and creditors cannot use them for their use in paying remaining debt by default.
Life insurance proceeds are in fact considered part of an estate for Federal Estate Tax purposes. The value of the death benefit is included in the valuation of your estate.
It is important for the inheriting party to understand that if the valuation of the estate is over the tax exemption, taxes may be due.
In the end, it’s important to be specific with your policy and naming a beneficiary. Eliminate all guesswork, and if you are concerned the beneficiary may pass, name several beneficiaries or have your beneficiary be payable to a trust. Working closely with your insurance agent can help you to better understand how to be crystal clear with your policy.
Assemble The Experts Of Estate Planning, Finances, & Life Insurance
Term life insurance is a great way to pay off outstanding debts and financial burdens in the event of your sudden passing. Others though want the proceeds to go directly to a loved one to replace the loss of income due to a premature death.
Your beneficiary designation determines where your funds go and how they work with your estate. We strongly recommend working with a team of experts to best develop your family’s future finances in the event of your sudden death.
Working together with estate planners, financial advisors, and trusted insurance agents is our recommended strategy for covering all of your bases.
For a comprehensive understanding of term life insurance, the experts at Low Cost Life Insurance are your guides; working for your family’s benefit and financial stability. Let’s talk about your future plans today: 1-877-794-TERM (8376).
