What Would Happen to Your Family if You Died Today?
When you’re looking at long-term life insurance investments, one of the things that you should think about is investing in a life insurance policy that will allow you to protect your assets and secure your future. For example, a life insurance trust is an option that allows you to preserve your financial stability and protect your family. Here’s a look at a few reasons why you should consider talking to your insurance agent about this type of policy. It Comes With Tax Benefits A life insurance trust is a trust formed to hold the cash value of your life insurance policy. The proceeds that are credited to the trust are exempt from income tax. In addition, the money withdrawn by the trustee is also considered tax-free, which ensures that your trustee is receiving the full value of the trust. This kind of trust account will also help you to minimize the taxable estate. The gifts you make to the trust for premium payments will actually reduce the value of your estate. This can also help you to get your estate’s total value under the estate tax exemption limit. This could save the beneficiaries from having to pay any taxes on the estate itself when they inherit it. It Can Help You Protect Your Assets Using a life insurance trust is an ideal way to protect your assets. Putting your assets into this type of trust means that the trust itself owns the assets. They are a separate entity, so they’re not vulnerable to things like court claims. Your trust won’t be held responsible for judgements placed against you personally because it’s not your personal financial asset. This ensures that the assets you want left for your heirs will remain theirs no matter what happens. It Allows You To Define Access Limits Using a life insurance trust also gives you the freedom to set limitations on the access of the money. If you want to define solid rules about how your beneficiaries are able to get to the money, you can set those limitations. This will ensure that you can keep that money from being accessed all at once and blown irresponsibly. Instead, you can set age restrictions and distribution stages so that the money is funneled gradually. As you can see, a life insurance trust can be a beneficial investment. Before you decide to invest in any kind of life insurance policy, talk with your agent about putting money into a life insurance trust instead of a traditional policy. For more information, contact a company like Crummey...read more
Are you an adult with one or more small children? Do you want to make sure that your children are provided for no matter what happens to you? Although some people view life insurance as something that’s relatively unimportant and extraneous, an insurance policy can actually be an important part of your future plans. There are a number of reasons why you should seriously consider investing in a life insurance policy which may or may not apply to your current situation. A few of these reasons include: Cover funeral expenses: An ordinary burial can cost thousands or even tens of thousands of dollars. It’s not uncommon for people to put themselves into debt to bury their loved ones. Whether you pass on while your children are still small or it doesn’t happen for many, many years and your children have children of your own, you probably don’t want to put that kind of burden on them. You could set aside money for a funeral, but it’s easy to accidentally spend this money on things like broken appliances or car repairs before you actually pass on. A good life insurance policy will ensure that all of your final expenses are paid for. Pay for college: If you are involved in a fatal accident on the way to work, you obviously will no longer be able to make any contributions to a college fund. As a result, it’s possible that any kids you have may not be able to further their education after high school. A good life insurance policy will help to make sure that at least the first couple years of their college education will be taken care of. Even if the insurance money isn’t enough to pay for a full degree, paying for a year or two will help enable your child or children to be able to afford the rest of their degree. Fewer legal squabbles: While a life insurance policy doesn’t guarantee that a particular person will get money after you pass on, it can be more easily enforced than wishes that have been laid out in a will. For example, you might direct that your various possessions be sold or otherwise distributed to certain people. However, if one of your relatives somehow accesses and carries off these items before the will is read, it can be extremely difficult for your beneficiaries to prove that is what actually happened. If your beneficiaries are young children, it could be a decade or more before they are able to comprehend that their inheritance has gone missing. By this time, it would be too late to do anything. An insurance policy, on the other hand, will only pay out to the person named in the policy unless legally directed otherwise. This will help ensure that you are in better control of who will actually inherit your...read more