Enhance Your Estate with Life Insurance

Raising a Family

Did you know that life insurance is a versatile tool that can help with estate planning? Life insurance can serve either as an estate liquidity or estate enhancement vehicle. The most appropriate use of life insurance in an estate plan depends on the age, family circumstances, and financial status of a particular individual or couple.

Life insurance is most often used for estate enhancement by (1) younger clients, (2) clients with dependent family members, and (3) clients with small to moderate-sized estates. People in these categories generally cite “protection” as their primary need for life insurance. They want to protect their families from the loss of future earnings needed for their livelihood. These clients are either in or are progressing toward their peak earning years, and their families are relying on these future earnings to maintain their standard of living, educate their children, and accumulate potential retirement assets.

In a family with a special needs child or grandchild, the current needs might well continue long beyond the death of the child’s parents. In this instance, the estate enhancement should continue beyond the parents’ working years.

The death taxes facing younger clients with small to moderate-sized estates are relatively small. The applicable 1) credit amount, 2) marital deduction, and 3) portability provisions will generally remove the danger of federal estate taxes for these individuals. Thus, estate liquidity is not their primary concern, nor does it need to be. It is highly improbable that these clients will have accumulated enough wealth to replace their future incomes and support their families if the breadwinner dies prematurely.

Life insurance is the perfect estate enhancement tool to replace some or all of the financial loss created by a premature death. Many make the mistake of focusing on their retirement asset generation but fail to protect themselves and their loved ones today. Retirement “might” happen, but death “definitely” will. Have you ran a free life insurance quote recently? If you haven’t, I suggest you do now. 

About the author: Kyle McDonald holds FIC, FICF, FSCP® & CLTC designations. His viewpoint on life insurance is simple, “Anyone with a family must have life insurance. In the end, life insurance is for others you care about, not you.” He is ready to help you and your family get the best option available. Contact Kyle today at   1-800-651-1953 or KMcDonald@Pivot.com.