When it comes to setting aside assets for your beneficiaries, you may initially consider a will or a trust. While these estate planning documents are important, you must also consider using a life insurance plan. Such a plan may financially aid your beneficiaries in covering the costs that come with your unfortunate passing. Follow along to find out how to utilize life insurance in your estate plan to your beneficiaries’ benefits and how a proficient Broward County estate planning lawyer at The Probate Lawyers can help you strategically build a plan for you.
What are the different types of life insurance?
Importantly, there are three common types of life insurance. Like most estate planning tools, the plan in which you choose is dependent on your unique financial circumstances, your set of beneficiaries, and more. They are as follows:
- Term life insurance: this type of insurance pays out a death benefit if you, unfortunately, pass away during the term that the policy is active (i.e., 10 to 30 years). This is because it makes up for the cost of any lost income you experienced at a point in your life.
- Universal life insurance: this type of insurance stays in effect for your entire life, no matter when you pass away. There are more flexible premiums and death benefits and, in turn, fewer guarantees. This is because it gives you the right to raise or lower premium payments or coverage amounts at different points in your life.
- Whole life insurance: similarly, this type of insurance is permanent. However, there are more predictable premiums and guaranteed cash value accumulation. This is because the cash value accumulation will act as a savings component, therefore building up, tax-deferred, for your beneficiaries.
How can I utilize life insurance in my estate plan for my beneficiaries’ benefits?
Regardless of which type of life insurance plan you opt for, your beneficiaries are bound to receive benefits. That said, you may incorporate the following into your life insurance plan:
- You may set aside money for your beneficiaries to use for your funeral expenses, outstanding debts, final income taxes, and other final expenses.
- You may set aside money for your beneficiaries to use for their medical needs, educational needs, special needs, and other personal needs.
- You may set aside money for your beneficiaries to use for the estate taxes that come with their inheritance.
Of note, your beneficiaries may begin receiving payouts within 14 days of filing their claim. Make sure to review with them that, if they do not promptly receive this financial aid you put aside for them, then they must gain legal representation.
You must schedule your initial consultation with a talented Broward County estate lawyer as soon as you possibly can. Our team at The Probate Lawyers will be awaiting your phone call.
