Life insurance has many uses in an estate plan, observes investopedia, listing several of those uses:
- To provide liquidity in an estate (to pay expenses, provide access to cash for heirs while the estate is being settled)
- To repay debts
- To replace income that the deceased was providing to the household
- To accumulate wealth
First-to-die (also called joint whole life insurance)
When one of the couple (or of the group) dies, benefits are paid out to the surviving
insured. Typically this arrangement is used to insure spouses or a parent and child.
Survivorship life (also called second-to-die)
This policy pays out upon the last death of the couple or group instead of the first one. This type of insurance is also typically used for spouses, in parent-child or business
There are some circumstances where it makes sense to continue to carry life insurance past retirement, investopedia goes on to explain:
- You don’t have enough of a nest egg to provide for a surviving spouse
- Disabled adult children or other relatives rely on you for lifelong care
- You’re wealthy and need a tax advantaged savings vehicle (you’ve maxed out your savings in other tax-advantaged accounts)
That part about estate planning being highly individualized is very much in tune with our approach at the law firm of Rebecca W. Geyer & Associates. Our goal? To be a resource for clients, combining clear and concise legal recommendations with responsiveness and compassion, creating solutions to best meet each client’s needs.
- by Ronnie of the Rebecca W. Geyer blog team